Abstract
We set out in this study to determine whether there are any discernible variations in the relationship between accounting quality and the cost of capital that may be attributable to the level of institutional ownership. Our analysis involves a flexible econometric approach, based upon a ‘panel smooth transition regression’ (PSTR) analysis, using data on 64 listed firms in Taiwan covering the period from 2000 to 2017. Our results provide clear evidence to suggest that the relationship between accounting quality and the cost of capital does indeed vary with changes in the level of institutional ownership, a finding which, having relaxed the assumption that the interpretations of accounting information amongst investors are homogeneous, goes beyond the general finding within the extant literature of a linear relationship between accounting quality and the cost of capital.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
