The effect of increased disclosure on cost of capital: Evidence from China
AbstractThis study examined the relationship between disclosure and the cost of capital. Prior studies empirically testing this relationship provided mixed findings, and also raised several concerns, such as the endogeneity of disclosure, the information disclosure environment, and the sample size. This study investigated this relationship based on data from the Chinese capital market where a unique institutional arrangement makes the disclosure exogenous. This unique characteristic, in conjunction with a less stringent information environment and a big sample size, helped address these concerns. Our findings confirmed the negative relationship between disclosure and cost of capital. Copyright Springer Science + Business Media, LLC 2006
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Bibliographic InfoArticle provided by Springer in its journal Review of Quantitative Finance and Accounting.
Volume (Year): 27 (2006)
Issue (Month): 4 (December)
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Web page: http://springerlink.metapress.com/link.asp?id=102990
Disclosure; Cost of capital; Information asymmetry; Endogeneity;
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