IDEAS home Printed from https://ideas.repec.org/a/sae/ausman/v36y2011i1p5-14.html
   My bibliography  Save this article

Information and the cost of capital: The Easley-O’Hara (2004) model with endogenous information acquisition

Author

Listed:
  • Greg Clinch

    (University of Melbourne, Australia,)

  • Brett Lombardi

    (University of Melbourne, Australia)

Abstract

We investigate the impact of endogenous information acquisition on Easley and O’Hara’s (2004) result that moving information from being publicly to privately available results in an increase in a firm’s cost of capital. As in Christensen et al. (2010), when the cost of information acquisition is fixed, Easley and O’Hara’s result reverses. We study two scenarios, however, where Easley and O’Hara’s result can continue to hold (i): where the cost of information acquisition is increasing in its precision, and (ii) where the benefits of acquiring private information span multiple firms.

Suggested Citation

  • Greg Clinch & Brett Lombardi, 2011. "Information and the cost of capital: The Easley-O’Hara (2004) model with endogenous information acquisition," Australian Journal of Management, Australian School of Business, vol. 36(1), pages 5-14, April.
  • Handle: RePEc:sae:ausman:v:36:y:2011:i:1:p:5-14
    as

    Download full text from publisher

    File URL: http://aum.sagepub.com/content/36/1/5.abstract
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Filzen, Joshua J. & Schutte, Maria Gabriela, 2017. "Comovement, financial reporting complexity, and information markets: Evidence from the effect of changes in 10-Q lengths on internet search volumes and peer correlations," The North American Journal of Economics and Finance, Elsevier, vol. 39(C), pages 19-37.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:ausman:v:36:y:2011:i:1:p:5-14. 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: (SAGE Publications). General contact details of provider: http://www.agsm.edu.au .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.