The Joint and Separate Value Relevance of Discretionary and Non-Discretionary Disclosure : Does the Reporting Environment Matter?

We investigate the joint and separate value relevance of discretionary and non-discretionary disclosure. We use the generalized method of moments (GMM) and quantile regression models to assess the value relevance of accounting disclosure and the firm’s reporting environment using a sample of four countries (South Africa, India, the UK, and the USA). We found that non-discretionary and discretionary disclosure are value relevant when modelled jointly and separately. However, the value relevance of discretionary disclosure diminishes when the firm’s reporting environmental factors are included in the analysis while the value relevance of non-discretionary disclosure remains the same