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Does XBRL adoption reduce information asymmetry?

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  • Yoon, Hyungwook
  • Zo, Hangjung
  • Ciganek, Andrew P.
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    Abstract

    This paper examines whether or not XBRL (eXtensible Business Reporting Language) adoption reduces information asymmetry in a stock market context. Student t-tests and multiple regression analysis were employed to examine the effect of XBRL adoption on information asymmetry in the capital market. A significant and negative association exists between XBRL adoption and information asymmetry, which implies that the adoption of XBRL may lead to the reduction of the information asymmetry in the Korean stock market. In addition, the effect of XBRL adoption on reducing information asymmetry is stronger for large-sized companies than for medium-sized and small-sized companies. Based on these findings, the demand for XBRL-enabled applications and services in the capital market is expected to grow while governments should promote XBRL adoption for business reporting.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Business Research.

    Volume (Year): 64 (2011)
    Issue (Month): 2 (February)
    Pages: 157-163

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    Handle: RePEc:eee:jbrese:v:64:y:2011:i:2:p:157-163

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    Web page: http://www.elsevier.com/locate/jbusres

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    Keywords: XBRL Information asymmetry Corporate disclosure Firm size Korean stock market;

    References

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    Cited by:
    1. André Gräning & Carsten Felden & Maciej Piechocki, 2011. "Status Quo and Potential of XBRL for Business and Information Systems Engineering," Business & Information Systems Engineering, Springer, vol. 3(4), pages 231-239, August.
    2. Cacciolatti, Luca & Wan, Tingting, 2012. "A Study of Small Business Owners’ Personal Characteristics and the Use of Marketing Information in the Food and Drink Industry: A Resource-Based Perspective," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 3(2).

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