Problems and Perspectives in Management / Volume 4, Issue 3, 2006 © Orhan Celik, Alaattin Ecer, Hakan Karabacak, 2006 100 Impact of Firm Specific Characteristics on the Web Based Business Reporting: Evidence from the Companies Listed in Turkey 1 Orhan Celik, Alaattin Ecer, Hakan Karabacak Abstract The main purpose of our study is to analyze the impact of firm characteristics on the web based business reporting practices of the companies listed in Turkey. Relevant literature associating these two variables have mostly conducted empirical research in the developed countries. Contrary to the common approach, this study focuses on the financial market of a developing country and ex- amines the association between the web based business reporting and the firm specific characteris- tics. Our sample included 253 firms listed on the Istanbul Stock Exchange [ISE] (among which, there are no investment partnerships). In order to determine the disclosure levels of the web-based information, total and financial disclosure indexes have been constructed and, referring to the rele- vant literature, firm characteristics are determined to measure their potential impacts on the extent of information disseminated by ISE firms on their web sites. According to our results, size, indus- try classification and internalization could be used to explain level of information disclosed by the firms. Technology, risk and profitability are important factors for the Total Disclosure Index but not for the Financial Disclosure Index. Ownership structure, institutional investors and intangibles are the independent variables, which have not any significant association with the web-based dis- closure behavior. Key words: business reporting, internet reporting, web based disclosure, disclosure index, firm characteristics, listed turkish companies. JEL Classifications: M41, C12. 1. Introduction World Wide Web (Web) Technologies are extensively used by ever-increasing number of compa- nies around the world. A growing percentage of those companies have promoted websites on the Internet and have a tendency to disseminate business reporting information, including financial data, on their sites. The development of high-capacity communications networks, low-cost com- puter hardware, user-friendly software, and a computer savvy generation has made the Internet an effective option for distributing information (Petravick and Gillett, 1996). Many commentators are predicting that the printed annual report will gradually disappear as corporate reports increasingly move to the worldwide electronic medium of the Internet (Beattie and Pratt, 2003). A review of literature shows a number of reasons for the increased awareness of the electronic distribution in the reporting of business information leading to a rapid adoption of the Web for the dissemination of this information. These can be stated as follows: Today, annual and even quarterly reports do not capture and communicate material developments in sufficient time to meet market informational needs. Product cycles have shortened and products and whole companies become obsolete much more quickly now than ever before (Wallman, 1995). The rapidly changing business environment is forcing firms to develop reporting strategies that assist in creating competitive advantages for themselves (Burrus, 1997). Due to the dynamic business world, traditional paper based corporate reporting is becoming in- creasingly less timely and thus less useful to decision makers (Green, 1999). Shifting the focus of accounting from an aggregation concept premised on periodic reports to one premised on realtime access to disaggregated data permits access to more timely information (Wallman, 1997). 1 We would like to thank participants of The Seminar of Department of Business Administration for their valuable com- ments. Any remaining errors are ours.