Abstract

http://ssrn.com/abstract=2139641
 


 



Corporate Governance, Companies’ Disclosure Practices, and Market Transparency: A Cross Country Study


Wendy Beekes


Lancaster University - Department of Accounting and Finance

Philip R. Brown


University of Western Australia - Department of Accounting and Finance; University of New South Wales - Australian School of Business; Lancaster University - Department of Accounting and Finance; Financial Research Network (FIRN)

Wenwen Zhan


Lancaster University

Qiyu Zhang


Lancaster University Management School

January 13, 2015


Abstract:     
We examine the link between corporate governance, companies’ disclosure practices and their equity market transparency in a study of more than 5,000 listed companies in 23 countries covering the period 1 January 2003 to 31 December 2008. Our results confirm the belief that better-governed firms make more frequent disclosures to the market. We also find different levels of disclosure between common and code law countries, although firms with better governance in both code and common law countries make more frequent disclosures. We measure market transparency by the timeliness of prices. In contrast to single country studies, results show, for the 23 countries collectively, better corporate governance is associated with less transparent share prices. This would suggest that, when the underlying economic conditions and the firm’s business model are consistent with reduced corporate transparency, corporate governance is strengthened to mitigate agency costs. We are thus led to the conclusion that even if information is disclosed more frequently by better-governed firms, it is not necessarily the case their shares are priced more efficiently.

Number of Pages in PDF File: 60

Keywords: Corporate Governance, Disclosure Practices, Market Transparency, Legal Origin, Timeliness of Price Discovery

JEL Classification: G30, G38, M40

working papers series





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Date posted: September 1, 2012 ; Last revised: January 15, 2015

Suggested Citation

Beekes, Wendy and Brown, Philip R. and Zhan, Wenwen and Zhang, Qiyu, Corporate Governance, Companies’ Disclosure Practices, and Market Transparency: A Cross Country Study (January 13, 2015). Available at SSRN: http://ssrn.com/abstract=2139641 or http://dx.doi.org/10.2139/ssrn.2139641

Contact Information

Wendy Beekes (Contact Author)
Lancaster University - Department of Accounting and Finance ( email )
Lancaster LA1 4YX
United Kingdom
++44 (0)1524 593623 (Phone)
Philip R. Brown
University of Western Australia - Department of Accounting and Finance
School of Business, M250
35 Stirling Highway
Crawley WA 6009
Australia
+61 8 6488 2899 (Phone)
+61 8 6488 1047 (Fax)
University of New South Wales - Australian School of Business ( email )
Sydney, NSW 2052
Australia
Lancaster University - Department of Accounting and Finance ( email )
Lancaster LA1 4YX
United Kingdom
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia
HOME PAGE: http://www.firn.org.au

Wenwen Zhan
Lancaster University ( email )
Lancaster LA1 4YX
United Kingdom
Qiyu Zhang
Lancaster University Management School ( email )
Bailrigg
Lancaster, LA1 4YX
United Kingdom
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