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Impact of Readability on Corporate Bond Market

Author

Listed:
  • Jieyan Fang-Klingler

    (Quoniam Asset Management GmbH, 60327 Frankfurt, Germany)

Abstract

This paper investigates the impact of annual report readability on the corporate bond market. My findings indicate that in the US corporate bond market, firms with less readable annual reports tend to have higher credit spreads, higher credit spread volatilities, higher transaction costs, higher transaction costs volatility, smaller trade size, higher number of trades and higher number of trades volatility. This paper also provides the first answers to the question as to whether annual report readability matters to international market participants in the corporate bond market. My findings provide evidence that in the EUR corporate bond market, firms with more readable annual reports are associated with lower credit spreads.

Suggested Citation

  • Jieyan Fang-Klingler, 2019. "Impact of Readability on Corporate Bond Market," JRFM, MDPI, vol. 12(4), pages 1-18, December.
    • Handle: RePEc:gam:jjrfmx:v:12:y:2019:i:4:p:184-:d:294361
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    References listed on IDEAS

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    8. Ertugrul, Mine & Lei, Jin & Qiu, Jiaping & Wan, Chi, 2017. "Annual Report Readability, Tone Ambiguity, and the Cost of Borrowing," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 52(2), pages 811-836, April.
    9. Samuel B. Bonsall & Brian P. Miller, 2017. "The impact of narrative disclosure readability on bond ratings and the cost of debt," Review of Accounting Studies, Springer, vol. 22(2), pages 608-643, June.
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    Cited by:

    1. Lebelle, Martin & Lajili Jarjir, Souad & Sassi, Syrine, 2022. "The effect of issuance documentation disclosure and readability on liquidity: Evidence from green bonds," Global Finance Journal, Elsevier, vol. 51(C).
    2. Xing (Alex) Zhou, 2020. "Corporate Debt," JRFM, MDPI, vol. 13(9), pages 1-2, September.
    3. Alex Holcomb & Paul Mason, 2021. "The Effect of Industry Restructuring on Peer Firms," JRFM, MDPI, vol. 14(5), pages 1-25, May.
    4. Ibrahim El-Sayed Ebaid, 2023. "IFRS adoption and the readability of corporate annual reports: evidence from an emerging market," Future Business Journal, Springer, vol. 9(1), pages 1-12, December.
    5. Souad Lajili Jarjir & Martin Lebelle & Syrine Sassi, 2022. "The effect of issuance documentation disclosure and readability on liquidity: Evidence from green bonds," Post-Print hal-03428710, HAL.

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