IIARD International Institute of Academic Research and Development

IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH (IJBFR )

E-ISSN 2695-1886
P-ISSN 2672-4979
VOL. 11 NO. 4 2025
DOI: 10.56201/ijbfr.vol.11.no4.2025.pg45.55

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Financial Disclosure and Stock Market Reaction: Thematic Study of Investors’ Concern in Transparency of Corporate Firm

TONYE, Ogiriki ; RAYMOND, Timilaemi : .

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Abstract

The thematic paper explored the relationship between financial disclosure practices and stock market reactions, with a particular focus on investor concerns regarding corporate transparency. The research examined how both financial and non-financial disclosures influenced stock market behavior, investor perceptions, and market efficiency. Drawing on signaling theory, the study emphasized that transparency played a significant role in reducing information asymmetry and building trust between corporate firms and investors. The findings indicated that firms with comprehensive, accurate, and timely disclosures experienced positive stock market reactions, including greater price stability and increased investor confidence. In contrast, selective or delayed disclosures led to negative market reactions, often reflecting heightened uncertainty. Additionally, the paper highlighted the growing importance of non-financial disclosures, particularly environmental, social, and governance (ESG) factors, which shaped investor decisions and stock performance. The study concluded that corporate transparency was not only essential for regulatory compliance but also served as a strategic tool for improving investor relations, enhancing market efficiency, and ensuring long-term business success.

keywords:

Financial disclosure, Stock market, Transparency

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