Social media and corporate dialogue: the response of global financial institutions

Abstract

Purpose - The aim of this paper is to analyse the extent to which global financial institutions are using Web 2.0 technologies and social media initiatives to transform the way in which they perform their corporate disclosure, that is, if these entities are opening a real corporate dialogue. Design/methodology/approach - The web sites of 132 major global financial entities - in Europe (54 entities), the Asia-Pacific region (55) and the Americas (23) - have been scored according to a Sophistication Index, considering various relevant Web 2.0 technologies and social media implementations. The analysis, by means of least squares and logistic regression models, is consistent across both techniques. Findings - Web 2.0 technologies and social media are not fully available in the corporate reporting arena. Nonetheless, a significant influence is detected. The size of each entity and the region in which it operates influence the scored utilisation of Web 2.0 and social media initiatives. Research limitation/implications - Web 2.0 tools and social media initiatives have been researched via corporate web sites. Corporate visibility in the major social networks, and also the use of advanced web metrics, will remain topics for further research. Practical implications - A lack of strategy for implementing an effective corporate dialogue is clearly observed. Based on these findings the banking industry and the supervisory authorities, which are under special scrutiny due to the recent global crisis, can take much greater advantage of the potential of social media to open a real corporate dialogue, increasing the level of transparency. Originality/value - As social media are becoming more useful and ubiquitous, both academics and practitioners need some initial and reliable background data on this preliminary situation. The extraordinary role of protagonist that the banking industry has played in the recent economic upheavals justify its selection as a first sample for this exploratory study. [PUBLICATION ABSTRACT]

Introduction

Internet corporate reporting is a prolific area of research in which many substantial results have been obtained. Today the social media and Web 2.0 technologies are considered the "next milestone" in the evolution of corporate information and its analysis by the global financial community. [7] Chu and Xu (2009) have undertaken a bibliometric survey, performed on a set of 1,718 documents relating to Web 2.0, to explore the dimensions and characteristics of this emerging field. The main features of this new paradigm are that, according to their findings, Web 2.0 technology is of the user, by the user, and more importantly, for the user. Terms such as dynamism, interaction, collaboration, participation and trust are essential concepts in this context.

The evolving paradigm of Web 2.0, along with the rise of social networks and virtual communities, provides an opportunity to create places where people learn together and share their experiences ([10] Elia et al. , 2009). From the beginning it is necessary to state a clear distinction between multimedia and Web 2.0. In fact many corporate web sites offer web television and videos. But in many cases it is not possible to interact, offer an opinion, or download these materials to be re-used in other devices. Additionally a clear differentiation must be made between Web 2.0 supporting technologies and the social media as a result of the application of that technology in the current online social environment.

It is worth stressing that the user does not need to have any specific knowledge in order to participate. What we are witnessing is an unprecedented process of technological democratisation. In the context of corporate reporting the main application of the Web 2.0 technologies and the social media is that of corporate dialogue. This concept means that companies can take advantage of the evolution of the capacities of the web so that they can both provide information in much greater detail and of more use to users, and allow users to participate effectively through the use of new platforms. Adopting a corporate dialogue would mean putting aside the current model of unidirectional communication from the corporation to the user, and facilitating multidirectional flows between the stakeholders of any public or private entity (shareholders-owners, managers, employees, customers-users, suppliers, authorities, competitors, local communities, environment) (Figure 1 [Figure omitted. See Article Image.]).

Despite its exponential growth, at the present time these new instruments are not fully available for corporate reporting activity, in particular for the banking and investment industry, which is under special scrutiny due to the recent global crisis. An example of how social media initiatives are not fully available and related to financial online data is that Reuters.com situates its "Your view" space (a typical 2.0 framework open to citizen journalism, videos, opinions, etc.) in the "News" part of its web site, instead of on the "Business and finance" pages, where only unidirectional data are provided.

In the context of the challenges proposed by [31] Vasarhelyi and Alles (2008) this study is an initial exploratory survey, in which a set of research questions are formulated, methodological issues are discussed, and results are presented, as a continuation of the previous research on internet corporate reporting.

Background

Among other Web 2.0 technologies two paradigmatic examples can be mentioned. First, content syndication (webcasting-podcasting, RSS, ATOM and widgets) represents a new way of broadcasting that is taking place, by means of real-time web video or audio programs, specifically recorded and delivered for a specific purpose, such as a general shareholders meeting, or the communication of periodic results. This kind of material can be downloaded after the event, and re-used in different devices such as a cell phone or i-pod, etc. Second, sharing and bookmarking facilities allow a user to share and score a piece of web content with their friends by means of social networks (these will be mentioned later). Third, mashups are coherent combinations of pre-existing web services that allow a certain user within a platform to use another application, in a specific window, without the need to get out of the initial web site.

In the social media arena it may be pertinent to recall that blogs are publishing tools, managed by a particular identified author, whose entries appear in reverse chronological order, which make it possible for other users to record comments. It is also usual to find links to other blogs. Blogs are becoming a common platform for citizen journalism. Popular web sites where any individual can create a blog are listed by blogtopsites.com. Tagging or folksonomies, also called social bookmarking, is the process of assigning and sharing among users freely selected terms as resources. This approach is a form of user-generated metadata ([20] Lee et al. , 2009). These sets of metadata or folksonomies are dynamic dictionaries, in contrast to the previous hierarchical and static concept of a taxonomy. A good example of tagged photos is Flickr.com

Wikis are a special kind of web site, configured to support the entries of different users. An entry, in this context, is like an article in an encyclopaedia, but created by a volunteer user, and then modified, corrected and amended in a controlled fashion by other users. Wikipedia is the most well-known initiative; it is a generalist project aimed at creating accurate and up-to-date common knowledge. No previous demonstration of expertise is needed to participate; however a "bad" entry (incorrect, unsupported or irrelevant) is supposed to be reviewed and corrected in real time and on a continuous basis by the online community.

Media sharing systems should also be emphasised. These not only allow users to share videos (Youtube), photographs (Flickr), documents (DocStoc) and presentations (SlideShare), but also let others offer their evaluations and opinions. Flexible systems of intellectual property licenses, such as Creative Commons, have emerged to support the shared use of information.

Additionally social networks are new platforms for exchanging personal and professional information by means of the "mashup" philosophy. By allowing users to incorporate external web applications, these web sites constitute a new discussion forum, and a special marketplace. Facebook and MySpace can be mentioned as general networks, while Linkedin is a professional platform. Most of these social networks allow users to interconnect from one of these platforms to another. For example an entity can create a Youtube channel and a Facebook webpage, and then create links to or include materials from its own corporate web site. Twitter, as a social network and micro-blogging tool, represents a mix of functionalities.

According to [18] Jiang et al. (2009) companies can vastly improve their web sites by including more content reflective of due diligence and transparency, and by implementing Web 2.0 services and technologies. [15] Herget and Mader (2009) have formulated various metrics for the determination of the impact and level of usage of Web 2.0 mechanisms. [14] Hearn et al. (2009) explain that companies can reach out and build relationships with new stakeholders who were previously inaccessible or invisible using traditional communications media. However, there are no systematic studies of the specific need of the banking and investment community for disclosure, although it has a significant role in the global economy and in the recent crisis, and it has been one of the industries in which the regulators required online transparency ([5] Bonsón et al. , 2007). Given the possibility for firms to make online information available for a broad array of stakeholders and by means of more sophisticated media, it may not be surprising that the internet can give these firms a competitive advantage over competitors who do not provide internet disclosures ([9] Debreceny et al. , 1999). According to the so-called "followers' effect" ([21] Lyabert, 2002), and considering the influence of the banking industry in other economic sectors, it is highly possible that other organisations from different industries will stay abreast of what the banks are providing and will also look for inspiration regarding what should be included on their site, as Web 2.0 or social media functionalities.

Regulatory bodies around the globe have begun to require public firms to make their obligatory disclosures sooner ([25] Pinsker, 2008), so the technological support underlying corporate reporting is being continuously improved. The banks, especially in the current environment, should be able to improve their image and get productive feedback from the public to create new products, change managerial attitudes and increase transparency, as other kinds of companies are now doing ([29] Tapscott and Williams, 2008), thinking of users as co-developers of content and opinion ([23] O'Reilly, 2005). This new paradigm is being perceived as very interesting by practitioners ([8] Constanzo, 2009; [19] Kupp and Anderson, 2007). In the context of the EU, due to the advent of Basel II, which requires the banking industry to face different types of risk, and increases market discipline and transparency ([5] Bonsón et al. , 2007), the content of the corporate webpage is now being specifically regulated. Therefore, these entities can acquire competitive advantages by improving the technological and participative functionalities of their web sites. Another important reason to select the banking industry as the focus of this paper is the fact that this is one of the most highly regulated activities, even after years of de-regulation, which means that this is an industry where the ex-ante situation can be more accurately observed. According to [27] Shih et al. (2010) the ability to create knowledge is highly relevant in the banking industry. This specific kind of company should define their own robust mechanisms for knowledge creation to improve their knowledge creation ability. They state that knowledge creation in banks should focus on the exchange and sharing of information, which in fact is the main goal of the use of social media and Web 2.0 technologies. However the results of this research are also applicable to other industries. Accordingly, as stated by [28] Tadesse (2006), banking systems are less vulnerable to crisis if supported by financial reporting regimes characterised by more comprehensive disclosure, more timely financial reporting, more informative reporting, and more credible financial disclosure. To the extent that banking crises are costly, Tadesse's paper documents the positive impact of accounting information on the real sector of the economy.

Hypotheses

The use of social media and Web 2.0 for corporate reporting can be understood as an additional step in the internet reporting strategy of the corporations. Following the rich literature of empirical studies this paper observes organisational size as one of the variables used most frequently to explain the disclosure of information (i.e. [11] Gallego et al. , 2009). The bigger the entity, the more resources it should be able to deploy for the development and operation of a high quality web site ([6] Bonsón et al. , 2008). In fact if a company reaches a certain level of size, then it tends to formulate a defined strategy of web development, openness and design, considering different dimensions such as content, accessibility and navigation quality, among others. Furthermore, the effect of governmental regulations on company disclosure, and the different cultural influences on voluntary reporting, have been analysed by several authors ([2] Álvarez et al. , 2008; [22] Nowland, 2008). Accordingly, the following hypotheses were formulated:

H1 The level of corporate dialogue is positively related to the size of the entity.

H2 . The level of corporate dialogue is influenced by the region of operation.

Financial crises cause a disruption in market value cycles and in other accounting variables such as profitability and levels of debt, so the impact of the profitability and the debt (also called leverage) in this specific kind of online reporting remains for further research, as both variables have been stated as relevant in previous literature about online transparency ([24] Oyelere et al. , 2003). Also, the exploratory character of this study justifies the decision of the authors not to test more explanatory factors, until we have a clearer view of the state of the industry.

Methodology

As commented before, it is essential to get an overall view of the current status of corporate dialogue by the global banking institutions, assuming this does exist in some form. The present paper utilises data collection from official corporate web sites and accounting and stock market data as the dataset, and least squares and logistic regression as the statistical tools to perform the analysis.

Data collection

The sample for this study consisted of the 132 main global financial entities operating in the banking and investment industry, corresponding to the Banks Supersector reported by Stoxx (www.stoxx.com) in 2009 for Europe (54 entities), the Asia-Pacific region (55) and the Americas (23). The population represented by this sample would be all the entities with similar activities ([6] Bonsón et al. , 2008). This sample is an adequate group to represent the approximately 16,000 commercial banks operating in the whole world, according to the statistics prepared by the [33] World Bank (2007), providing a level of significance of 5 per cent in the sample selection process, valid for both the least squares and logistic regression techniques described NEXT. The construct to perform the data collection is a non-exhaustive Sophistication Index (SI(j)=[i, i=0, 14]/14) used to score the corresponding web sites. The data collection was performed by two independent researchers, both with academic backgrounds in IT and business administration, working at the same time. There was an initial meeting with the supervisor of the research team to clearly set the strategy for each indicator, and the empirical results were reviewed at the end to solve any dissimilarities and to overcome any possible bias. As there were no qualitative constructs involved in this empirical research, there was no need to perform pretests. An additional reason for that is the fact that the elements of the SI were not subjectively weighted. Data collection of explanatory variables depends on the type of proxy that was selected, and it did not imply any special complexity, as shown below.

Statistical techniques

Consequently each webpage (j, j=1,132) was rated with each component of the SI being a dichotomous variable. During the web search, the information provided, both compulsorily and voluntarily, was analysed; the distinction between these two categories is a possibility for further research. The various different specific parts of each corporate group web site that were analysed include Press Rooms, Investor Relations and Sustainability. In order to be positively scored all the instruments searched in each web site, as stated in the preliminary meeting mentioned above, had to incorporate the possibility of receiving the opinions of the users, whether with certain restrictions or with complete freedom. With respect to the explanatory variables, ASSETS, as the total assets declared by each bank at 31 December 2008, and MARKET, as the market value reported by Reuters.com and Google Finance for the same date, are the proxies selected for the size of the entity. In order to adapt the magnitudes, natural logarithms of the primary data were obtained. Additionally, they were classified according to EUROPE, the AMERICAS and ASIA-PAFICIC as regions of operation, and dummy variables as assigned. For all the least squares estimations the Jarque-Bera normality test was applied to the estimation errors to ensure the validity of the generalisations provided (See Table I [Figure omitted. See Article Image.]).

In addition to the descriptive statistics and least squares analysis described below, this paper presents a second technique used to explore in more detail the behaviour of the SI. In statistics, logistic regression (sometimes called the logistic model or logit model) is used for predicting the probability of an event's occurrence by fitting data to a logistic curve. The logistic regression model is used when the response variable of interest takes one of two values. Possible situations include studies where subjects are either alive or dead, have or do not have a particular characteristic and so on. We will define such a response variable as y, and denote the event y=1 when the subject has the characteristic of interest and y=0 when the subject does not. Logistic regression is used extensively in the medical and social sciences, as well as in marketing applications such as predicting a customer's propensity to purchase a product or cease a subscription (for further information about this technique see [16] Hilbe, 2009; [12] Greene, 2003; [1] Agresti, 2002; [17] Hosmer and Stanley, 2000; [4] Balakrishnan, 1991; [3] Amemiya, 1985).

In this context we use a logit model to predict the occurrence of a financial entity having a value of SI above the average, using a chain of models as described below: Equation 1 [Figure omitted. See Article Image.] Equation 2 [Figure omitted. See Article Image.] where:

LOGSI =The probability of a financial entity having a value of SI above the average.

LOG (ASSETS) =The total assets declared by each bank at 31 December 2008.

AMERICAS, EUROPE, ASIAPACIFIC =Classified according to their regions of operation, and dummy variables as assigned.

The estimated coefficient on each independent variable is easy to interpret in a classic linear regression model, but difficult to interpret in a model estimated using the logit technique. However, the relative size of each coefficient reflects the relative effect of the independent variables on the predicted probability for the dependent variable. The values of the probability (z-Statistic) for each variable are used to evaluate the reliability of the estimation made. Table II [Figure omitted. See Article Image.] and Figure 2 [Figure omitted. See Article Image.] show the two selected variables and their influence.

Results

According to the estimations presented (Table III [Figure omitted. See Article Image.], Figures 3 and 4 [Figure omitted. See Article Image.]) the results show that, in general, the level of usage of the described Web 2.0 mechanisms is low, with a significant proportion of the sample reporting a value of zero for the entire checklist (Table IV [Figure omitted. See Article Image.], Figure 5 [Figure omitted. See Article Image.]). As reported in Table III [Figure omitted. See Article Image.] the econometric estimation by means of the least squares technique indicates a certain degree of correlation between the SI and the dependent variables tested, according to the probability (<0.05) related to t-Student and F-Snedecor indicators. The application of many of the elements that comprise the SI index is limited; as an example, for webcasting and on-demand videos, many companies prefer to use external servers, such as Thomson Reuters services, instead of free access web sites such as Youtube, where they would be able to deal with the public feedback for each communication.

The results of the logistic estimation support the initial analysis, significant at the 1 per cent level, according to the z-statistic indicator: there is a positive relationship between size and the SI score. It can be also said that the entity's region of operation has some influence on the evolution to the corporate dialogue paradigm, which is identified at least by the use of syndication and webcasts (Table IV [Figure omitted. See Article Image.]) as a technological prerequisite. These results are consistent with the previous results of [24] Oyelere et al. (2003) which demonstrated that the same factors that traditionally influenced corporate reporting also influence financial reporting via the internet. So this consensus reinforces the idea that the use of social media and the paradigm of corporate dialogue is a new step in the continuous evolution from classical corporate reporting to the use of the most sophisticated media for that task (See Table II [Figure omitted. See Article Image.] and Figure 2 [Figure omitted. See Article Image.]).

Discussion and implications for the industry

At the moment the principal financial corporations in America, Asia-Pacific and Europe present disparate attitudes. In effect, in the current context of crisis, only some of the global-scale financial entities are marking out positions in the new social networks as preferred marketplaces. What is certain is that the new technological base is now available to all the companies, allowing them to take action on two fronts: the mass distribution of the content of the corporate web site as an amplification of the pre-existing uni-directional system, and/or the implementation of corporate dialogue.

In the first case the company can make use of the Web 2.0 technologies to facilitate the mass redistribution of content, making them more visible but staying with a uni-directional model. An example of this approach is the implementation of functionalities that allow users to redistribute the contents of a corporate web site in their own blogs or social networks (such as ShareThis) or to syndicate them (using RSS, ATOM), with the object of having updated information available at all times. This approach is not true dialogue but it would involve the much greater expansion, if appropriate, of the corporate web site content.

In the second case the use of the social media represents the utilisation by the company of social network platforms to actively open corporate dialogue. They could, for example, generate Facebook or Twitter groups or pages, Youtube channels or SlideShare and DocStoc spaces; another option would be to create blogs where not only the members of the management but also individuals associated with the principal groups of stakeholders would have the opportunity of publishing their own points of view on the material distributed. In the implementation of a strategy for corporate dialogue, as stated by [26] Postman (2009), use of the social media can lead to increased transparency and immediacy, and can make it possible for all the users to participate and get involved directly in the process of communication through the contribution of content, comments, tagging, etc.

The following is a short list of examples of the potential advantages that, a priori, a bank can obtain from each social media functionality; also indicated are some of the major challenges that these entities need to face.

- Blogs: the bank's management can collect valuable opinions from the shareholders, suppliers, depositors, investors, employees and from the beneficiaries of its corporate responsibility activities. Blogs could also be a valuable tool for detecting credit problems and for obtaining ideas for new financial products and services.

- Tagging or folksonomies: initiatives of this kind can be of assistance to the management of the financial entity in developing new products or services, in the sense that it is sometimes difficult to create categories of product by risk type. According to the new Basel II agreement, which is in force, banks must formulate their own strategies for controlling risks. If the entity is able to open this process to the public, it can obtain surprisingly high quality feedback for this complex task.

- Wikis: a particular financial entity could start a wiki project about its corporate social responsibility activities. In effect, it would be asking users to create the content, register their profiles and suggest changes to specific initiatives. Wikis have also been considered helpful for improving a company's relationship with its employees, under certain conditions ([30] Trkman and Trkman, 2009).

The following are examples of relationships between potential corporate dialogue and some underlying Web 2.0 technologies:

- Content syndication webcasting-podcasting standards and software: banks can also benefit from the use of standards such as RSS or ATOM, and hence avoid the need for extensive and frequent email alerts, by externalising the syndication of content and news.

- Sharing and bookmarking facility : the entity may be able to disseminate news and results more efficiently from its corporate web site through the various leading social networks such as Facebook, Twitter, etc, which may result in it becoming more attractive to specific potential investors or customers.

- Mashups: the technology can be optimised to integrate different initiatives in a unique corporate web site, avoiding inconveniences of dispersion and providing the opportunity to develop a coherent strategy for web design and development.

In a context of recent crisis, where all the economic actors and supervisory authorities are looking at the evolution and performance of the banking and investment industry, corporate dialogue initiatives can open up new lines of operation and communication for these entities, as an exemplary behaviour to be extended to the rest of the global economy.

With respect to the presence of each entity in the main social networks and forums, these kinds of external platform also need to be observed and considered by bank managers. For example, [13] Halavais (2009, p. 444) explains, with reference to Digg.com, how the users of a participatory web platform need to receive specific feedback from the board responsible for the entity, from which both parties would obtain different benefits:

First, the more explicit feedback a user receives, in the form of moderation votes on their comment or responses to their comment, the sooner they contribute again. Second, those who do comment generally become more able to generate feedback as they become more experienced contributors to the site. Third, there are some common features of comments that receive more feedback, and the feedback system reinforces these standards. By making the process of community feedback relatively accessible and measurable, Digg provides an opportunity to observe the process of socialisation into a community and inculcation of community standards.

Conclusions, limitations and further research

The main finding of this exploratory study is that there is a clear lack of strategy regarding the effective management of corporate dialogue among financial institutions. Web 2.0 technologies exist, but are not related to other quality initiatives such as navigability or accessibility. It is not a question of resources or technology. Some entities with an SI score of zero offer a good level of accessibility, and also offer e-voting in shareholders' meetings. At first sight, and in accordance with the previous literature, it is a question of perceived lack of control of the information disclosed and the public feedback potentially returned. While the results provide some interesting insights into the usage of Web 2.0 and social media technologies by the main actors of the global economy, and that can provide a basis for future research, the results must be interpreted in the light of the limitations of the study. The internal structure of each entity and the specific regulation of each country were not observed in this first article. Moreover, due to the turbulence and rapid growth of Web 2.0 and social media technology, the results provided may only reflect the situation of the industry at a point in time. One of the limitations of the exploration is that the global distribution in three very large regions hides a variety of normative and cultural differences in each at the national level. Another limitation is that the Web 2.0 tools and social media initiatives have been searched in corporate web sites. This does not necessarily mean that internet opinion communities operating outside the corporate site of the entity do not exist. For example, it is possible to find public discussions about a particular company at Google Finance, or the unofficial Youtube channels. So the tasks remaining for further research include extending this study to a national level to obtain better comparisons, studying how entities use their corporate visibility in the main social networks, and utilising advanced web metrics.

So in accordance with the participative philosophy of the new social media, the aim of this paper is not only to offer an initial empirical view, but also to obtain some kind of feedback for the re-formulation of different questions, and related methodological issues, in order to get a dynamic consensus around the agenda, in the context of the challenges proposed by [31] Vasarhelyi and Alles (2008):

- Is it possible to obtain a list of competitive advantages of corporate dialogue for the leading banking entities? How can that kind of list be created, and validated with the opinion of the main parties involved? Could the Delphi approach be a good research technique for that?

- Is it possible to detect synergies or contradictions between the different Web 2.0 mechanisms and social media initiatives? How could the inter-dependences between these technologies be detected and managed in a multi-channel reporting perspective? How can we measure and weight the relative importance of each element for the banks' reporting strategy?

- Is corporate dialogue more likely to be adopted for voluntary or compulsory disclosures?

- How can we measure the situation (cross-section approach) and also the evolution (time series approach) of the implementation of corporate dialogue by the banks? Could we use the same kind of Sophistication Indices in both scenarios? Could the evolution of web metrics in the context of the social media be helpful for these tasks?

- Can the regulatory authorities and central banks (Federal Reserve, European Central Bank, Bank of Basel, Bank of Japan, etc.) also use these initiatives? Could we have a more participative monetary policy?

- How can we change the use and the functioning of the working groups of standards such as XBRL (eXtensible Business Reporting Language), based on qualified consensus around taxonomies, to incorporate the popularisation of folksonomies ? What is the opinion of the leading banks and regulatory authorities on the proposals put forward by [32] Wenyi and Tao (2008)? Could this integration help to change a situation in which "the fundamentals of accounting - and accounting research - remain as they were a decade earlier" ([31] Vasarhelyi and Alles, 2008, p. 228)?

- How could a company or institution administer the issues of intellectual property and responsibility in the context of collaborative reports and projects?

There will be many challenges in the context of this new online philosophy. For example there is the question of user expertise: how much trust should the entity place in the online communities for the formulation of tags, opinions, etc.? Another aspect will be how to manage intellectual property rights and responsibility in this context. These and other challenges for the increased democratisation of the WWW will be considered in further research.

Proceedings of the ICCEE 2008: International Conference on Computer and Electrical Engineering

References

1. Agresti, A. (2002), Categorical Data Analysis, Wiley-Interscience, New York, NY.

2. Alvarez, I.G., Sanchez, I.M.G. and Dominguez, L.R. (2008), "Voluntary and compulsory information disclosed online: the effect of industry concentration and other explanatory factors", Online Information Review, Vol. 32 No. 5, pp. 596-622.

3. Amemiya, T. (1985), Advanced Econometrics, Harvard University Press, Boston, MA.

4. Balakrishnan, N. (1991), Handbook of the Logistic Distribution, Marcel Dekker, New York, NY.

5. Bonsón, E., Escobar, T. and Flores, F. (2007), "Sub-optimality of income statement-based methods for measuring operational risk under Basel II: empirical evidence from Spanish banks", Financial Markets, Institutions and Instruments, Vol. 16 No. 4, pp. 201-20.

6. Bonsón, E., Escobar, T. and Flores, F. (2008), "Navigation quality as a key value for the web page of a financial entity", Online Information Review, Vol. 32 No. 5, pp. 623-34.

7. Chu, H. and Xu, C. (2009), "Web 2.0 and its dimensions in the scholarly world", Scientometrics, Vol. 80 No. 3, pp. 717-29.

8. Constanzo, H. (2009), "Web 2.0: a simple concept, a complex solution", Bank Technology News, Vol. 22 No. 3, p. 24.

9. Debreceny, R., Gray, G. and Rahman, A. (1999), "Voluntary financial reporting on the internet: an international perspective", paper presented at the Annual Meeting of the American Accounting Association, San Diego, CA, 15-18 August.

10. Elia, G., Margherita, A. and Taurino, C. (2009), "Enhancing managerial competencies through a wiki-learning space", International Journal of Continuing Engineering Education and Life-long Learning, Vol. 19 Nos 2-3, pp. 166-78.

11. Gallego, I., García, I. and Rodríguez, L. (2009), "Universities' web sites: disclosure practices and the revelation of financial information", The International Journal of Digital Accounting Research, Vol. 9, pp. 153-92.

12. Greene, W. (2003), Econometric Analysis, 5th ed., Prentice-Hall, Upper Saddle River, NJ.

13. Havalais, A. (2009), "Do dugg diggers digg diligently?", Information Communication and Society, Vol. 12 No. 3, pp. 444-59.

14. Hearn, G., Foth, M. and Gray, H. (2009), "Applications and implementations of new media in corporate communications: an action research approach", Corporate Communications, Vol. 14 No. 1, pp. 49-61.

15. Herget, J. and Mader, I. (2009), "Social software in external corporate communications - a conceptional approach towards measuring, assessment and optimization of Web 2.0 activity ("Social software in der externen unternehmenskommunikation - ein gestaltungsansatz zur messung, bewertung und optimierung von Web 2.0-aktivitäten")", Information-Wissenschaft und Praxis, Vol. 60 No. 4, pp. 233-40.

16. Hilbe, J. (2009), Logistic Regression Models, Chapman & Hall/CRC Press, London.

17. Hosmer, D. and Stanley, L. (2000), Applied Logistic Regression, 2nd ed., Wiley, Chichester.

18. Jiang, Y., Raghupathi, V. and Raghupathi, W. (2009), "Content and design of corporate governance web sites", Information Systems Management, Vol. 26 No. 1, pp. 13-27.

19. Kupp, M. and Anderson, J. (2007), "Zopa: Web 2.0 meets retail banking", Business Strategy Review, Vol. 18 No. 3, pp. 15-17.

20. Lee, C.S., Goh, D.H.-L., Razikin, K. and Chua, A.Y.K. (2009), "Tagging, sharing and the influence of personal experience", Journal of Digital Information, Vol. 10 No. 1, pp. 1-15.

21. Lyabert, N. (2002), "Online financial reporting: an analysis of the Dutch listed firms", The International Journal of Digital Accounting Research, Vol. 2 No. 4, pp. 195-234.

22. Nowland, J. (2008), "The effect of national governance codes on firm disclosure practices: evidence from analyst earnings forecasts", Corporate Governance, Vol. 16 No. 6, pp. 475-91.

23. O'Reilly, T. (2005), "What is Web 2.0: design patterns and business models for the next generation of software", available at: http://oreilly.com/web2/archive/what-is-web-20.html (accessed 4 November 2010).

24. Oyelere, P.B., Laswad, F. and Fisher, R. (2003), "Determinants of internet financial reporting by New Zealand companies", Journal of International Financial Management and Accounting, Vol. 14 No. 1, pp. 26-63.

25. Pinsker, R. (2008), "An empirical examination of competing theories to explain continuous disclosure technology adoption intentions using XBRL as the example technology", The International Journal of Digital Accounting Research, Vol. 8, pp. 81-96.

26. Postman, J. (2009), SocialCorp: Social Media Goes Corporate, New Riders, Berkeley, CA.

27. Shih, K.H., Chang, C.J. and Li, B. (2010), "Assessing knowledge creation and intellectual capital in the banking industry", Journal of Intellectual Capital, Vol. 11 No. 1, pp. 74-89.

28. Tadesse, S. (2006), "The economic value of regulated disclosure: evidence from the banking sector", available at: http://ideas.repec.org/p/wdi/papers/2007-875.html (accessed 4 November 2010).

29. Tapscott, D. and Williams, A.D. (2008), Wikinomics. How Mass Collaboration Changes Everything, Atlantic Books, London.

30. Trkman, M. and Trkman, P. (2009), "A wiki as intranet: a critical analysis using the DeLone and McLean model", Online Information Review, Vol. 33 No. 6, pp. 1087-102.

31. Vasarhelyi, M.A. and Alles, M.G. (2008), "The 'now' economy and the traditional accounting reporting model: opportunities and challenges for AIS research", International Journal of Accounting Information Systems, Vol. 9 No. 4, pp. 227-39.

32. Wenyi, L. and Tao, X. (2008), "Research of WEB 2.0-based XBRL network model", , IEEE, Los Alamitos, CA, pp. 209-13.

33. World Bank (2007) "Statistics", available at: http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/0,contentMDK:20345037∼pagePK:64214825∼piPK:64214943∼theSitePK:469382,00.html#Survey_III (accessed 4 November 2010).

Appendix

About the authors

Enrique Bonsón is a Professor of Accounting at the University of Huelva (Spain). His main research interests are IT, artificial intelligence, international regulation, internal control, digital reporting and continuous auditing. He has worked with a wide variety of academic and professional institutions all over the world. He is Vice-President of XBRL Spain and also President of the New Technologies Commission of the Spanish Accounting and Business Administration Association. He is also Editor of The International Journal of Digital Accounting Research .

Francisco Flores is a Researcher and Lecturer in New Technologies in Accounting and Business Administration at the University of Huelva (Spain). His main research interests are IT, digital reporting, digital transparency on the web, Basel II, internal controls and the impact of international regulations. He is a member of the COREP-XBRL Group, reporting to the Committee of European Banking Supervisors on the implementation of Basel II in the European Union. Francisco Flores is the corresponding author and can be contacted at: [email protected]

  

Illustration

Equation 1

  

Equation 2

  

Figure 1: Corporate dialogue

  

Figure 2: Results from least squares estimation

  

Figure 3: SI behaviour

  

Figure 4: SI descriptive statistics

  

Figure 5: Results from logit estimation

  

Table I: SI index and web metrics

  

Table II: Equations estimation for SI (least squares)

  

Table III: Estimation of equations for SI (Logit)

  

Table IV: Level of use of each Web 2.0 mechanism