Abstract
This paper explores the economic effects of financial reporting transparency of newly listed firms and outcomes associated with enhanced disclosure and financial reporting activities. We find a negative correlation between financial reporting transparency and information asymmetry in newly listed firms during their first five years of public trading. Further, we find a significant positive link between perceived business risk and implied cost of equity for these new public companies. Furthermore, we find a positive association between financial reporting transparency and the cost of equity. Our study helps to extend the research on the consequences of increased disclosures of newly listed firms.
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