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


UWA Business School, M250; Financial Research Network (FIRN)

Wenwen Zhan


Lancaster University

Qiyu Zhang


Lancaster University Management School

May 1, 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 greater disclosure in common law relative to code law countries. However 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 timely share prices. This would suggest that, when the firm has lower 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 does not necessarily follow that information is reflected in share prices on a timelier basis.

Number of Pages in PDF File: 57

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

JEL Classification: G30, G38, M40


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Date posted: September 1, 2012 ; Last revised: May 12, 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 (May 1, 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
UWA Business School, M250 ( email )
Crawley, Western Australia 6009
Australia
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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