*7.5. Multivariate Analysis*

Table 4 presents the results of our regression model. The adjusted R<sup>2</sup> measuring the strength of the relationship between the set of independent variables and dependent variable is 47.3 percent, which indicates that independent variables are relevant in predicting FRDI. The Durbin–Watson statistic is between 1 and 3, indicating that the errors in regression are independent. The computed F is 26.808, and hence supports our hypotheses. The standardized coefficient on size is 0.290 and is positively significant at the 1% level, suggesting the firm size is positively and significantly associated with the level of financial risk disclosure. The confidence on financial performance is 0.116 and positively significant at the 5% level. The coefficient on financial leverage is 0.036 positive, but statistically insignificant. The coefficient on the type of auditor is 0.449 and positive and significant at the 1% level. Coefficients of industry types are not statistically significant. These results sugges<sup>t</sup> that larger companies, more profitable companies, and companies audited by Big 4 firms provide more financial risk disclosures. One possible explanation is that the bigger the firm, and the higher the profitability, the higher the level of resources available, particularly in developing countries, and thus the higher the level of disclosure produced.

> **Table 4.** The Level of Financial Disclosure and Firm Financial Attributes.




This table presents the results from a regression of the level of financial risk disclosure and firms financial attributes. The dependent variable is the level of financial risk disclosure (FRDI). The independent variables are firm size, financial performance, leverage, liquidity, and industry classifications. This table presents results from OLS (Ordinary Least Squares) regression of the level of FRDI on financial attributes. The definitions of all other variables are reported in Table 1. Standard errors are clustered at the firm level, and *t*-statistics are reported in the related column. Significance at the 10%, 5%, and 1% levels are denoted by \*, \*\*, and \*\*\*, respectively.
