Abstract
ABSTRACT The demand for online information in stock markets around the world has led to many stock exchanges requiring the disclosure of information on listed corporations through the stock exchange website. We examine the impact of online access to corporate information on stock exchange websites on market transparency. We posit that institutionalized online information dissemination is likely to reduce the level of information asymmetry in stock markets. To increase the spread in the types of markets and market features in our sample, we expand the sample size of 40 or fewer countries commonly used in recent cross-country studies to 110 countries. Our proxy for the level of information asymmetry in stock markets is the cost of equity capital (COE). We examine the online availability of corporate information on the websites of the stock exchanges (AVAILABILITY) of the 110 countries, and find that there is a negative association between COE and AVAILABILITY. Further analysis shows that this association is stronger for emerging market countries, equity-based (common law) countries, and low press transparency countries. We conclude that while institutionalized online information dissemination is beneficial to all capital markets, it mostly benefits emerging capital markets, equity-based markets (common law countries) and markets with weaker alternative information sources.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: 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.