Disclosure and cost of equity capital in emerging markets: The Brazilian case
In this paper, we conjecture that the weak association between disclosure and cost of equity capital found in the literature (Botosan, 1997) can be caused by the high-level corporate disclosure environment found in the United States. We hypothesize that in low-level corporate disclosure environments the variability in disclosure practices across firms will be larger than in the United States, and, consequently, the marginal effect of voluntary disclosure policies will be higher. Using a newly developed Brazilian Corporate Disclosure Index (BCDI), our results confirm this hypothesis. Disclosure is strongly associated with ex ante cost of equity capital for Brazilian firms. The results are more pronounced for firms with less analyst coverage and low ownership concentration, as expected.
If 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.
References listed on IDEAS
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.:
- Luzi Hail, 2002. "The impact of voluntary corporate disclosures on the ex-ante cost of capital for Swiss firms," European Accounting Review, Taylor & Francis Journals, vol. 11(4), pages 741-773.
- Durnev, Art & Kim, E. Han, 2004.
"To Steal or Not to Steal: Firm Attributes, Legal Environment, and Valuation,"
CEI Working Paper Series
2004-7, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
- Art Durnev & E. Han Kim, 2005. "To Steal or Not to Steal: Firm Attributes, Legal Environment, and Valuation," Journal of Finance, American Finance Association, vol. 60(3), pages 1461-1493, 06.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, 1999.
"Investor Protection and Corporate Valuation,"
Harvard Institute of Economic Research Working Papers
1882, Harvard - Institute of Economic Research.
- Ball, Ray & Kothari, S. P. & Robin, Ashok, 2000. "The effect of international institutional factors on properties of accounting earnings," Journal of Accounting and Economics, Elsevier, vol. 29(1), pages 1-51, February.
- Ruland, William & Shon, John & Zhou, Ping, 2007. "Effective controls for research in international accounting," Journal of Accounting and Public Policy, Elsevier, vol. 26(1), pages 96-116.
- Doidge, Craig & Karolyi, G. Andrew & Stulz, Rene M., 2004.
"Why Do Countries Matter So Much for Corporate Governance?,"
Working Paper Series
2004-16, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
- Doidge, Craig & Andrew Karolyi, G. & Stulz, Rene M., 2007. "Why do countries matter so much for corporate governance?," Journal of Financial Economics, Elsevier, vol. 86(1), pages 1-39, October.
- Rene M. Stulz & Craig Doidge & Andrew Karolyi, 2004. "Why Do Countries Matter So Much for Corporate Governance?," NBER Working Papers 10726, National Bureau of Economic Research, Inc.
- Ding, Yuan & Jeanjean, Thomas & Stolowy, Herve, 2005.
"Why do national GAAP differ from IAS? The role of culture,"
The International Journal of Accounting,
Elsevier, vol. 40(4), pages 325-350.
- Yuan Ding & Hervé Stolowy & Thomas Jeanjean, 2005. "Why Do National GAAP Differ from IAS ? The Role of Culture," Post-Print halshs-00006343, HAL.
- Fama, Eugene F. & French, Kenneth R., 1997. "Industry costs of equity," Journal of Financial Economics, Elsevier, vol. 43(2), pages 153-193, February.
- Alberto Chong & Florencio López-de-Silanes, 2007. "Investor Protection and Corporate Governance : Firm-Level Evidence Across Latin America," World Bank Publications, The World Bank, number 6769.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 2000.
"Agency Problems and Dividend Policies around the World,"
Journal of Finance,
American Finance Association, vol. 55(1), pages 1-33, 02.
- Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Agency Problems and Dividend Policies Around the World," Harvard Institute of Economic Research Working Papers 1839, Harvard - Institute of Economic Research.
- Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert Vishny, 1998. "Agency Problems and Dividend Policies Around the World," NBER Working Papers 6594, National Bureau of Economic Research, Inc.
- 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.
- Yuan Ding & Thomas Jeanjean & Hervé Stolowy, 2005.
"Reply to discussion of "Why Do National GAAP Differ from IAS ? The Role of Culture","
- Ding, Yuan & Jeanjean, Thomas & Stolowy, Herve, 2005. "Reply to discussion of "Why do national GAAP differ from IAS? The role of culture"," The International Journal of Accounting, Elsevier, vol. 40(4), pages 359-362.
- Ball, Ray & Robin, Ashok & Wu, Joanna Shuang, 2003. "Incentives versus standards: properties of accounting income in four East Asian countries," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 235-270, December.
- Lang, Mark & Smith Raedy, Jana & Wilson, Wendy, 2006. "Earnings management and cross listing: Are reconciled earnings comparable to US earnings?," Journal of Accounting and Economics, Elsevier, vol. 42(1-2), pages 255-283, October.
- Diamond, Douglas W & Verrecchia, Robert E, 1991. " Disclosure, Liquidity, and the Cost of Capital," Journal of Finance, American Finance Association, vol. 46(4), pages 1325-59, September.
- Nikolaev, V. & van Lent, L.A.G.M., 2005. "The endogeneity bias in the relation between cost-of-debt capital and corporate disclosure policy," Other publications TiSEM 04869b30-e8a9-4ecf-84ae-6, Tilburg University, School of Economics and Management.
When requesting a correction, please mention this item's handle: RePEc:eee:accoun:v:45:y:2010:i:4:p:443-464. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
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.