Mandatory Disclosure Quality, Inside Ownership, and Cost of Capital
نویسندگان
چکیده
منابع مشابه
Mandatory Disclosure Quality, Inside Ownership, and Cost of Capital
Abstract This paper examines whether and how inside ownership mediates the relation between disclosure quality and the cost of capital. Both ownership and more transparent reporting have the potential to align incentives between managers and investors thereby reducing systematic risk. Employing a large global sample across 35 countries over the 1990 to 2004 period, we show that countrylevel dis...
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It is widely believed that disclosure quality improves investors’ welfare by reducing cost of capital in a competitive market. This paper examines this conventional wisdom by studying a production economy in which disclosure influences a firm’s investment decisions. I demonstrate three points. First, cost of capital could increase with disclosure quality when new investment is sufficiently elas...
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Mandatory quality disclosure is pervasive across several industries and often includes a period over which the quality of new entrants is unreported. This provides the opportunity for forward-looking firms to adjust product characteristics in advance of disclosure. Using comprehensive data on Medicare Advantage from 2007-2014, I first demonstrate empirically that there exists a consumer respons...
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Neoclassical models postulate that firms’ investment is determined by expected profitability and the cost of capital. Capital market imperfections, caused by information asymmetries and agency costs, lead to a modified investment scenario, where the external cost of capital is higher than the cost of internal funds. This, in turn, leads to the well-known result of underinvestment by firms. We h...
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ژورنال
عنوان ژورنال: European Accounting Review
سال: 2014
ISSN: 0963-8180,1468-4497
DOI: 10.1080/09638180.2014.985691