Abstract
High quality of information disclosure can reduce the information asymmetry, which is very important to the effective operation of the capital market. This article studies whether participants in bond market are concerned about the quality of information disclosure based on a sample of listed companies in China’s bond market from 2007 to 2013. We find that there is no significant relationship between information disclosure quality and credit rating, indicating the credit rating agencies are not concerned about information disclosure quality. However, we find information disclosure quality can significantly reduce the bond financing cost, which indicates that bond investors are concerned about information disclosure quality.
Highlights
The bond market develops rapidly in recent years, China’s bond market is still far behind the stock market (Bottelier, 2003) [1]
Heflin et al (2011) [5] did an empirical research with the U.S bond market data to test the relationship between information disclosure quality and credit rating, they found that the higher quality of information disclosed in the annual report, the higher credit rating
Information disclosure plays an important role in the capital market, many studies supported the signal theory from the theoretical and empirical level, but researchers in China found only participants of the stock market are concerned about information disclosure quality
Summary
The bond market develops rapidly in recent years, China’s bond market is still far behind the stock market (Bottelier, 2003) [1]. (2014) Are Participants in Bond Market Concerned about the Quality of Information Disclosure: Evidence from Chinese Listed Companies. There is no research on whether bond investors are concerned about the information disclosure quality. High quality of information disclosure can help to solve the problem of asymmetric information and reduce the moral and speculation risk. This plays a very important role in protecting the investors’ interests and promoting the development of capital market. This article explores whether the China’s bond market participants are concerned about the information disclosure quality, trying to make up for the lack of related research and making some policy suggestions for the development of China’s bond market
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