Effects Of Information Transparency Research Articles

The impact of information transparency on trade credit: the mediation role of risk

PurposeExisting literature demonstrates the important role of information transparency in enterprise development and market surveillance. However, little empirical research has examined the information transparency effect in supply chain management. This study aims to fill this gap by exploring the significant role of information transparency on supply chain financing and its mechanism, taking trade credit as the starting point.Design/methodology/approachFrom the data set comprising 3,880 Chinese firms with A-shares listed on the Shenzhen and Shanghai Stock Exchanges from 2011 to 2020, we obtain the basic picture of information transparency and trade credit. Panel fixed effects regression is used to test the hypotheses concerning the antecedents to trade credit.FindingsThe empirical results show that: first, information transparency can significantly support corporate access to trade credit and is found to facilitate financing by mitigating perceived risk. Second, among companies with higher levels of financing constraints, weaker market power and more concentration of suppliers, information transparency promotes trade credit more markedly. Third, the outbreak of COVID-19 causes a substantial increase in uncertainty and risk in external circumstances and then the effect of information transparency is weakened. Fourth, the contribution to trade credit is likely to be stronger for disclosures containing management transparency elements compared to single financial transparency.Originality/valueTo the best of our knowledge, this study is one of the first to explore the positive role of information transparency to supply chain financing, which to a certain extent makes up for the lack of information transparency research in the supply chain. It provides new ideas for enterprises to obtain trade credit financing and promote the improvement of supervision departments’ disclosure policies.

The effect of information transparency on capital budgeting with privately informed agents: a short research note

The effect of information transparency on capital budgeting with privately informed agents: a short research note

Information Transparency, Debt and the Cost of Equity Capital: Evidence from China

This study adopted the signalling theory perspective to explore the effect of information transparency on the cost of equity capital among enterprises in China. Variables of information transparency and debt ratio were used to examine their influence on the cost of equity capital of enterprises in China between 2014 and 2015. The empirical results revealed that information transparency negatively affected the cost of equity capital, regardless of examining all observations simultaneously or examining the samples from 2014 and 2015 separately. However, the effect observed in 2014 was non-significant. In addition, debt positively moderated the effect of information transparency on the cost of equity capital. The results revealed that investors of the capital market paid attention to both financial and nonfinancial information disclosed by enterprises. This finding should be of great value to enterprise managers, supervisors, and decision-makers in financial or socioeconomic systems similar to that of China. Previous relevant studies have rarely explored emergent economies in socialist systems. The empirical results of this study facilitated reinforcing the research gap regarding how enterprises in socialist countries reduce their cost of equity capital amidst the economic development therein.

Learning from and Disclosing to the Crowd

We investigate the real effects of information transparency in crowdfunding markets. Our analysis identifies that crowdfunding provides a benefit for an entrepreneur to learn consumers' preferences before deciding whether to implement an innovative project. However, the crowdfunding market also features an under-implementation inefficiency, driven by two types of uncertainty that consumers face: fundamental uncertainty about the entrepreneur's implementation cost, and strategic uncertainty due to potential coordination failures among consumers. We find that greater transparency regarding the implementation cost, although diminishes the fundamental uncertainty, may not necessarily mitigate the strategic uncertainty. We obtain a somewhat surprising result that, from an ex ante perspective, greater transparency actually makes the under-implementation problem even worse, thus impairing efficiency.

The Effect of Information Transparency on the Valuation of Website and Additional Information Inquiry, Payment Intention : The Moderated Mediating Effect of Perceived Risk

The Effect of Information Transparency on the Valuation of Website and Additional Information Inquiry, Payment Intention : The Moderated Mediating Effect of Perceived Risk

A Network Diffusion Model of Food Safety Scare Behavior considering Information Transparency

This study constructs the network diffusion model of food safety scare behavior under the effect of information transparency and examines the network topology and evolution characteristics of food safety scare behavior in a numerical simulation. The main conclusions of this study are as follows. (1) Under the effect of information transparency, the network degree distribution of food safety scare behavior diffusion demonstrates the decreasing characteristics of diminishing margins. (2) Food safety scare behavior diffusion increases with the information dissemination rate and consumer concern about food safety incidents and shows the characteristics of monotone increasing. And with the increasing of the government food safety supervision information transparency and media food safety supervision information transparency, the whole is declining characteristic of diminishing marginal. In addition, the extinction of food safety scare behavior cannot be achieved gradually given a single regulation of government food safety supervision information transparency and media food safety supervision information transparency. (3) The interaction effects between improving government food safety supervision information transparency or media food safety supervision information transparency and declining consumer concerns about food safety incidents or information transmission rate can engender the suppression of food safety scare behavior diffusion.

Information Transparency, Corporate Governance, And Convertible Bonds

Information transparency is a popular topic in capital markets. A firms corporate governance policy, which influences its disclosure behavior and disclosure quality, influences the information transparency perceived in relation to that firm. It was previously understood that greater information asymmetry between investors and issuers/underwriters translates into a larger discount required to be offered in bond pricing by the issuing firm, to attract investors. In this paper, we numerically analyze: (a) the effect of the composition of the board structure on corporate information transparency under the code law system, and (b) the effect of information transparency on the initial return rate of convertible bonds. The results of our study revealed that the board structure affects corporate information disclosure policies under the code law system. Specifically, CEO duality tends to bring about lower information transparency, whereas better information transparency emanates from a higher proportion of independent directors. However, there is a lack of conclusive evidence to support the view that the shareholdings of directors and large shareholders are correlated with information transparency. We also show numerically that greater information transparency combined with lesser information asymmetry (between insiders and outsiders) leads to a lower initial return rate of convertible bonds.

Does Higher Transparency Lead to More Search in Online Auctions?

In a controlled field experiment, we examine pairs of auctions for identical items under different conditions. We find that auction design features that are under the control of the auctioneer—including information transparency, number of simultaneous auctions, and the degree of overlap between simultaneous auctions—affect bidder search and choice. Clickstream data show that a significant relationship between information transparency and price dispersion can be linked to search. Specifically, the effect of information transparency on price dispersion is fully mediated by lookup behavior. Combining these findings, we make auction design recommendations regarding the provision of product and value information.

The effects of information transparency on analysts& forecasts: evidence from the information disclosure and transparency ratings system in Taiwan

In an attempt to reduce the information asymmetry between corporate insiders and outsiders, the Taiwan Stock Exchange Corporation (TSEC) and the Gre Tai Securities Market (GTSM) requested the Securities and Futures Institute to implement an information disclosure and transparency ratings system (IDTRS) for all publicly traded companies listed on the TSEC and the GTSM. This study investigates the effects of the IDTRS on the properties of analysts’ forecasts. The results indicate that analysts’ earnings forecasts are more accurate and the earnings forecast dispersion among analysts decreases after the implementation of the IDTRS. Additionally, the results estimated from the post IDTRS period show that the analysts’ earnings forecast errors and dispersion of the “more transparent” companies are smaller than those of the “less transparent” companies.

The Effects of Information Transparency on Suppliers, Manufacturers, and Consumers in Online Markets

This paper looks into the effects of information transparency on market participants in an online trading environment. We study these effects in business-to-business electronic markets with firms competing in both upstream and downstream industries. The prior literature generally assumes that either the downstream firm (buyer) or the upstream firm (seller) is a monopoly. It is not clear whether information transparency would still create value if both buyers and sellers face oligopolistic competition, where the benefits of information transparency could be competed away. To answer this question, we first develop a simple two-echelon e-market model and then extend the model to more general settings. We find that information transparency can create value for the overall e-market, yet it affects buyers and sellers very differently: one side will be hurt, depending on the competition mode (Cournot or Bertrand) in the downstream. This suggests that a manufacturer-owned, a supplier-owned, and a neutral e-market will have different preferences for information transparency. Finally, we find that information transparency can hurt consumers when the downstream industry engages in Bertrand competition. This is a surprising result given the expectation that online markets create substantial value for consumers.

Focus on Authors

Focus on Authors

Information Exchange in Electronic Markets: Implications for Market Structures

:The proliferation of information and of access to information made possible by the Internet has stimulated a fundamental rethinking of market structures. The greater information transparency between consumers and suppliers of products/services makes it necessary to answer such questions as how markets will emerge, how the balance of power between suppliers and buyers may shift, and who will benefit most from changing market structures. While electronic commerce via the Internet is a relatively new phenomenon, instantaneous information flow has long been an integral part of securities markets in the United States. The Securities Acts Amendments of 1975 explicitly recognized the emergence of consumers with instant access to alternative supplier information, and mandated movement toward a system that consolidated price and trading information. Viewing products markets through the frame of securities markets, this study examines the effects of information transparency on market structures. It finds that suppliers, for strategic reasons, may impede or selectively channel the flow of information in “free” market space. Depending on the markets and consumers involved, this can lead either to fragmentation or to integration.