Determinants of Internet financial disclosure by local governments

This paper examines the characteristics of local government that influence the voluntary spread of financial information on the Internet. Following an agency theory approach, we propose five hypotheses that state the relationship between voluntary financial disclosure and size, leverage, capital investment, political competition, and press visibility of the local authority. The empirical application reveals that size, capital investment,. and political competition are positively associated with the discretionary Internet financial disclosure practices. On the other hand, we also found a negative and statistically significantly relationship between press visibility and voluntary financial disclosure.