Voluntary disclosure earnings quality and cost of capital pdf

Disclosure and cost of equity capital in emerging markets. Voluntary disclosure is considered as independent variable and earnings quality and cost capital as dependent variables. University of groningen voluntary disclosure of corporate. A theory of voluntary disclosure and cost of capital. Social disclosure, financial disclosure and the cost of. Voluntary disclosure and the cost of capital greg clinch. Disclosure regulation and cost of capital opportunities and challenges in.

Structural equation modeling in archival accounting. Introduction this study provides evidence on the association between firm value and voluntary disclosure quality. Voluntary disclosure and the cost of equity capital. Ceo reputation and reporting quality, with allen huang, shiva rajgopal, and amy zhang. We summarize the information by documenting changes in earnings quality over time.

This study examines whether there is a lower level of voluntary disclosures for focused. Disclosure quantity quality cost price supply of disclosure demand for disclosure local gaap lax enforcement country a country b strict enforcement. Studies that examine the association between voluntary public disclosure and cost of. For achieving research objectives, 93 firms are selected to be studied during the period of 2008 to 2010. Voluntary disclosure and the cost of capital by greg. The investigation of the effect of voluntary disclosure on earnings quality and cost of capital in firms listed in tehran stock exchange. The investigation of the effect of voluntary disclosure on. Finally, we examine ho w investors respond to earnings and the importance of voluntary disclosures by managers as a means of supplementing the information in earnings.

The relation between disclosure quality and reporting. Different from prior studies that assume a unidirectional effect of disclosure level or quality on the cost of capital e. We find that firms with good earnings quality have more expansive voluntary disclosures as proxied by a self. It may also reduce conflicts of interest in widely held firms voluntary disclosure is also affected by shareholder demands. Social disclosure, financial disclosure and the cost of equity capital article in accounting organizations and society 267. One incentive for voluntary disclosure is the need to raise capital at the lowest possible cost. The magnitude of the effect is such that a oneunit difference in the disclosure measure is associated with a difference i disclosure quality is also important but very difficult to.

An investigation of the causal effect of voluntary. Financial reporting and disclosure practices in china. The voluntary disclosure literature studies firms endogenous disclosure decisions and their consequences on the type of information disclosed verrecchia 1983, dye 1985. State antitakeover laws and voluntary disclosure journal. Structural equation modeling in archival capital markets. Contemporary accounting research spring 2008, 25, 1. The relation between disclosure quality and reporting quality. Pdf voluntary disclosure, earnings quality, and cost of. This paper explores the links between firms voluntary disclosures and their cost of capital. Request pdf voluntary disclosure, earnings quality, and cost of capital abstract we investigate the relations among voluntary. Jennifer francis douglas and josie breeden professor of. Voluntary disclosure, earnings quality, and cost of. Olssonvoluntary disclosure, earnings quality, and cost of capital journal of accounting research, 46 1 2008, pp. Andreas zweifel autor jahr 2012 seiten 94 katalognummer v354793 isbn ebook 9783668410626 isbn buch.

Finally, we illustrate how chps 8kbased voluntary and mandatory disclosure measures can be used to enhance our understanding of firms disclosure environments. Options trading and corporate voluntary disclosure1. And we provide explanations for the changes as well as discussion of. For example, if voluntary disclosures complement earnings quality, then firms with better earnings quality will disclose more. Request pdf voluntary disclosure, earnings quality, and cost of capital abstract we investigate the relations among voluntary disclosure, earnings quality, and cost of capital. We investigate the association between voluntary disclosure and the riskrelated discount investors apply to price. Disclosure, ownership structure, earnings announcement lag.

Conservatism, disclosure and the cost of equity capital. Potential endogeneity bias is controlled for by adopting a twostage least squares approach in a crosssectional setting. In this paper, i find that when disclosure is voluntary firms that disclose their information have a lower cost of capital than. We examine two components of firm value cost of equity capital and expected cash flows, allowing for the possibility that disclosure quality may affect value differentially across firms.

Empirical evidence indicates that management manages earnings and lowers. An examination of voluntary quarterly segment disclosures. Pdf the investigation of the effect of voluntary disclosure on. The aim of this study is to investigate the effect of voluntary disclosure on earnings quality and cost of capital in firms listed in tehran stock exchange. Abstract we investigate the relations among voluntary disclosure, earnings quality, and cost of capital. We find that firms with good earnings quality have more ex pansive voluntary disclosures as proxied by a selfconstructed.

Motivations for a change in disclosure frequency and its consequences. The effect of twitter dissemination on cost of equity. K filings in fiscal 2001 than firms with poor earnings quality. Companies might increase their voluntary disclosure in order to raise capital more cheaply on the markets. Options trading and corporate voluntary disclosure abstract this study examines the effect of options trading on corporate voluntary disclosure behavior. We find that firms with good earnings quality have more expansive voluntary disclosures as proxied by a selfconstructed index of coded items found in 677 firms annual reports and 10k filings in fiscal 2001 than firms with poor earnings.

Voluntary disclosure, earnings quality, and costs of capital, with per olsson and dj nanda, journal of accounting research march 2008. The relation between voluntary disclosure quality and cost of equity capital is widely known to be affected by selfselection. We contribute directly to the literature on the relation between disclosure and cost of capital botosan, 1997. Voluntary disclosure, mandatory disclosure, and cost of. More recently, hail 2011 in his discussion of serafeim 2011 similarly suggests that, as is the case with a commitment. We find that firms with good earnings quality have. Conversely, in the region with higher marketization progress, government would reduce the intervention in the enterprise, because of the greater flexibility to intervention, the nonstateowned listed companies would reduce more cost of equity capital than the stateowned listed companies through voluntary disclosure.

We provide additional evidence from followup questionnaires and onsite interviews that corroborate our main findings and explore the potential explanations. We find that firms with good earnings quality have more expansive voluntary disclosures as proxied by a selfconstructed index of coded items found in 677 firms annual reports and 10k filings in fiscal 2001 than firms with poor earnings quality. My paper is related to three strands of literature. The relationship between disclosure quality and cost of equity capital is an. Disclosure levels, stock market liquidity, and earnings quality. We investigate the relations among voluntary disclosure, earnings quality, and cost of capital. The impact of voluntary corporate disclosures on the exante cost. Voluntary disclosure benefits investors, companies and the economy. First, we study the association between endogenous disclosure choice and the discount in price induced by changes in the underlying model parameters.