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Can Internet-Based Disclosure Reduce Information Asymmetry?

Author

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  • Jean-François Gajewski

    (IREGE - Institut de Recherche en Gestion et en Economie - USMB [Université de Savoie] [Université de Chambéry] - Université Savoie Mont Blanc)

  • Li Li

    (Montpellier Business School)

Abstract

The Internet is widely used by listed companies to manage investor relations. Since January 2007, the French Financial Authority has required companies listed on Euronext-Paris to disclose all mandatory financial information via the Internet in order to enhance information transparency. This paper examines the impact of Internet-based disclosure on the French stock market by analyzing the relationship between information asymmetry and Internet disclosure practices. Extending previous studies on Web-based disclosure, a checklist of 40 items is developed to evaluate the level of Internet-based voluntary disclosure. Measuring information asymmetry by the spread and the probability of informed trading, we show that greater Web-based disclosure lowers information asymmetry in the French financial market.

Suggested Citation

  • Jean-François Gajewski & Li Li, 2015. "Can Internet-Based Disclosure Reduce Information Asymmetry?," Post-Print halshs-01497381, HAL.
    • Handle: RePEc:hal:journl:halshs-01497381
    DOI: 10.1016/j.adiac.2015.03.013
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01497381
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