The economic consequences of increased disclosure
- Economic theory suggests that a commitment by a firm to increased levels of disclosure should lower the information asymmetry component of the firm’s cost of capital. But whi le the theory is compelling, so far empirical results relating increased levels of disclosure to measurable economic benefits have been mixed. One explanation for the mixed results among studies using data from firms publicly registered in the US is that, under current US reporting standards, the disclosure environment is already rich. In this paper, we study German firms that have switched from the German to an international reporting regime (IAS or US -GAAP), thereby committing themselves to increased le vels of disclosure. We show that proxies for the information asymmetry component of the cost of capital for the switching firms, namely the bid-ask spread and trading volume, behave in the predicted direction compared to firms employing the German reporti ng regime.
Author: | Christian LeuzORCiDGND, Robert E. Verrecchia |
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URN: | urn:nbn:de:hebis:30:3-553769 |
URL: | https://www.econbiz.de/archiv/f/uf/finanzierung/increased_dislosure.pdf |
ISSN: | 1434-3401 |
Parent Title (German): | Universität Frankfurt am Main. Fachbereich Wirtschaftswissenschaften: [Working paper series / Finance and accounting] Working paper series, Finance & Accounting ; No. 41 |
Series (Serial Number): | Working paper series / Johann-Wolfgang-Goethe-Universität Frankfurt am Main, Fachbereich Wirtschaftswissenschaften : Finance & Accounting (41) |
Publisher: | Johann-Wolfgang-Goethe-Universität, Frankfurt am Main, Fachbereich Wirtschaftswissenschaften |
Place of publication: | Frankfurt am Main |
Document Type: | Working Paper |
Language: | English |
Year of Completion: | 2000 |
Year of first Publication: | 1999 |
Publishing Institution: | Universitätsbibliothek Johann Christian Senckenberg |
Release Date: | 2020/08/31 |
Tag: | Cost of Capital; Disclosure; IAS; International Accounting; US GAAP |
GND Keyword: | Deutschland; Publizitätspflicht; Asymmetrische Information; Kapitalkosten; International Financial Reporting Standards; International Accounting Standards; Kapitalmarkteffizienz; Schätzung |
Issue: | Revised: June 2000 |
Page Number: | 52 |
HeBIS-PPN: | 47025260X |
Institutes: | Wirtschaftswissenschaften / Wirtschaftswissenschaften |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Sammlungen: | Universitätspublikationen |
Licence (German): | Deutsches Urheberrecht |