The value relevance of disclosure: Evidence from the emerging capital market of Egypt
AbstractThis study examines the value of voluntary and mandatory disclosure in a market that applies International Accounting Standards (IAS) with limited penalties for non compliance. The lack of enforcement creates an element of choice in the level of mandatory disclosure by companies. Using panel-data analysis, our empirical results show that, after controlling for factors such as asset size and profitability, mandatory disclosure has a highly significant but negative relationship with firm value. This result, although puzzling from a traditional perspective, is consistent with the predictions of analytical accounting models, which emphasize the complex interplay of factors determining disclosure effects. Our results also show that voluntary disclosure has a positive but insignificant association with firm value. This lack of statistical significance supports the view that there is a complex interplay of different factors determining the relationship between disclosure and firm value.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal The International Journal of Accounting.
Volume (Year): 44 (2009)
Issue (Month): 1 (March)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/620179
Disclosure Firm value Cost of capital Economic consequences Egypt;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Beverly R. Walther, 2004. "Discussion of Information Transparency and Coordination Failure: Theory and Experiment," Journal of Accounting Research, Wiley Blackwell, vol. 42(2), pages 197-205, 05.
- Lins, Karl V., 2003. "Equity Ownership and Firm Value in Emerging Markets," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(01), pages 159-184, March.
- Lo, Kin, 2003. "Economic consequences of regulated changes in disclosure: the case of executive compensation," Journal of Accounting and Economics, Elsevier, vol. 35(3), pages 285-314, August.
- Yakov Amihud & Haim Mendelson, 2000. "The Liquidity Route To A Lower Cost Of Capital," Journal of Applied Corporate Finance, Morgan Stanley, vol. 12(4), pages 8-25.
- Brown, Keith C. & Harlow, W. V. & Tinic, Seha M., 1988. "Risk aversion, uncertain information, and market efficiency," Journal of Financial Economics, Elsevier, vol. 22(2), pages 355-385, December.
- Hyun Song Shin & Stephen Morris, 2001.
"Coordination Risk and the Price of Debt,"
FMG Discussion Papers
dp373, Financial Markets Group.
- Stephen Morris & Hyun Song Shin, 1999. "Coordination Risk and the Price of Debt," Cowles Foundation Discussion Papers 1241R, Cowles Foundation for Research in Economics, Yale University, revised Feb 2002.
- Stephen Morris & Hyun Song Shin, 1999. "Coordination Risk and the Price of Debt," Cowles Foundation Discussion Papers 1241, Cowles Foundation for Research in Economics, Yale University.
- Regina M. Anctil & John Dickhaut & Chandra Kanodia & Brian Shapiro, 2004. "Information Transparency and Coordination Failure: Theory and Experiment," Journal of Accounting Research, Wiley Blackwell, vol. 42(2), pages 159-195, 05.
- Rene M. Stulz, 1999. "Globalization of Equity Markets and the Cost of Capital," NBER Working Papers 7021, National Bureau of Economic Research, Inc.
- Christine A. Botosan, 2000. "Evidence That Greater Disclosure Lowers The Cost Of Equity Capital," Journal of Applied Corporate Finance, Morgan Stanley, vol. 12(4), pages 60-69.
- Asquith, Paul & Mullins, David Jr., 1986. "Equity issues and offering dilution," Journal of Financial Economics, Elsevier, vol. 15(1-2), pages 61-89.
- Luzi Hail, 2002. "The impact of voluntary corporate disclosures on the ex-ante cost of capital for Swiss firms," European Accounting Review, Taylor and Francis Journals, vol. 11(4), pages 741-773.
- Healy, Paul M. & Palepu, Krishna G., 2001. "Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature," Journal of Accounting and Economics, Elsevier, vol. 31(1-3), pages 405-440, September.
- Omaima A.G. Hassan & Gianluigi Giorgioni & Peter Romilly, 2006. "The extent of financial disclosure and its determinants in an emerging capital market: the case of Egypt," International Journal of Accounting, Auditing and Performance Evaluation, Inderscience Enterprises Ltd, vol. 3(1), pages 41-67.
- Bushee, Brian J. & Leuz, Christian, 2005. "Economic consequences of SEC disclosure regulation: evidence from the OTC bulletin board," Journal of Accounting and Economics, Elsevier, vol. 39(2), pages 233-264, June.
- Patel, Sandeep A. & Balic, Amra & Bwakira, Liliane, 2002. "Measuring transparency and disclosure at firm-level in emerging markets," Emerging Markets Review, Elsevier, vol. 3(4), pages 325-337, December.
- Christine A. Botosan, 2002. "A Re-examination of Disclosure Level and the Expected Cost of Equity Capital," Journal of Accounting Research, Wiley Blackwell, vol. 40(1), pages 21-40, 03.
- Baek, Jae-Seung & Kang, Jun-Koo & Suh Park, Kyung, 2004. "Corporate governance and firm value: evidence from the Korean financial crisis," Journal of Financial Economics, Elsevier, vol. 71(2), pages 265-313, February.
- Fama, Eugene F & French, Kenneth R, 1992. " The Cross-Section of Expected Stock Returns," Journal of Finance, American Finance Association, vol. 47(2), pages 427-65, June.
- Richard Lambert & Christian Leuz & Robert E. Verrecchia, 2007. "Accounting Information, Disclosure, and the Cost of Capital," Journal of Accounting Research, Wiley Blackwell, vol. 45(2), pages 385-420, 05.
- Vassili Joannides & Nicolas Berland & D. T. Wickramasinghe, 2010. "Post-Hofstede diversity/cultural studies: what contributions to accounting knowledge?," Grenoble Ecole de Management (Post-Print) hal-00676570, HAL.
- Nadia Loukil & Ouidad Yousfi, 2013. "Firm's Information Environment and Stock Liquidity : Evidence from Tunisian Context," Papers 1304.4852, arXiv.org.
- Nadia Loukil & Ouidad Yousfi, 2011. "Firm's Information Environment and Stock Liquidity : Evidence from Tunisian Context," Post-Print hal-00813921, HAL.
- Loukil, Nadia & Yousfi, Ouidad, 2010. "Firm's information environment and stock liquidity: evidence from Tunisian context," MPRA Paper 28699, University Library of Munich, Germany, revised Feb 2011.
- Omaima Hassan & Claire Marston, 2010. "Disclosure measurement in the empirical accounting literature - a review article," Accountancy Discussion Papers 1004, Accountancy Research Group, Heriot Watt University.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.