The Role of Financial Risk Disclosure in Shaping Stakeholder Perceptions in the Iraqi Biotechnology Sector

Abstract

This research investigates the role of financial risk disclosure in shaping impression management strategies within the context of Iraqi biotechnology and life sciences enterprises. A total of 30 indicators were utilized to measure financial risk disclosure, represented as a binary variable where a value of 1 signifies disclosure and 0 otherwise. Impression management was assessed using two proxies: performance comparison metrics and profit selection indicators. Data were collected through content analysis of financial reports from a sample of 10 banks listed on the Iraq Stock Exchange over a 10-year period (2013–2022), resulting in 100 observations (bank/year). The descriptive analytical method was employed to test the hypotheses. Findings indicate a significant positive relationship between financial risk disclosure and impression management strategies, particularly through performance comparison metrics. This suggests that increased transparency in financial risk disclosure enhances the ability of management to effectively shape stakeholder perceptions, including investors and regulators. While this study focuses on the banking sector, the insights gained have implications for biotechnology firms seeking to balance financial transparency with impression management to foster stakeholder trust and support commercialization efforts. Statistical analyses were conducted using SPSS by the researchers.