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Information disclosure, transparency ranking system and firms’ value deviation: evidence from Taiwan

Author

Listed:
  • Chien-Chi Chu

    (Shantou University)

  • Kung-Cheng Ho

    (Zhongnan University of Economics and Law)

  • Chia-Chun Lo

    (Prince Mohammad Bin Salman College (MBSC))

  • Andreas Karathanasopoulos

    (American University of Beirut)

  • I-Ming Jiang

    (Yuan Ze University)

Abstract

We examine whether the implementation of the information disclosure and transparency ranking system (IDTRS) affects firms’ value deviation in Taiwan using the annual reports of the listed companies for the period 2001–2004. Using firms’ value deviation as a proxy for information disclosure, we find that reducing information asymmetry can allay moral hazard. We also document a significant difference in the level of information disclosure in the years before and after the IDTRS implementation. Stronger information transparency can strengthen investment certainty and lead to less forecasting errors.

Suggested Citation

  • Chien-Chi Chu & Kung-Cheng Ho & Chia-Chun Lo & Andreas Karathanasopoulos & I-Ming Jiang, 2019. "Information disclosure, transparency ranking system and firms’ value deviation: evidence from Taiwan," Review of Quantitative Finance and Accounting, Springer, vol. 53(3), pages 721-747, October.
    • Handle: RePEc:kap:rqfnac:v:53:y:2019:i:3:d:10.1007_s11156-018-0764-z
    DOI: 10.1007/s11156-018-0764-z
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    More about this item

    Keywords

    Corporate governance; Firm value deviation; Information disclosure; Transparency ranking system;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law

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