The influence of voluntary disclosure on the volatility of firms from a multi-stakeholder perspective

This paper is on the relationship between the level of voluntary disclosure related to many corporate stakeholders and the volatility of the market returns among a representative sample of Italian listed companies, in the years 2006, 2009 and 2012. The source of the disclosure is all the available mandatory and voluntary documents. We empirically tested the hypothesis that companies providing more disclosure show a lower volatility than do competitors. Our findings show that disclosure indexes all have a growing trend. Also, the evidence suggests that information disclosure may be useful to the market. Controlling a number of other factors, we found that industries that disclose more information show lower measures of stock volatility than others. We also have ascertained that customers, suppliers, communities, competitors and financial lenders and environment disclosure have a moderate effect on volatility, whereas institutions and human capital and corporate governance disclosure seem to have no effect on volatility.