Property Rights Protection, Corporate Transparency, and Growth

47 Pages Posted: 25 Feb 2009

See all articles by Art Durnev

Art Durnev

University of Iowa - Henry B. Tippie College of Business

Vihang R. Errunza

McGill University - Desautels Faculty of Management

Alexander Molchanov

Massey University

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Date Written: February 25, 2009

Abstract

In countries with secure property rights, corporate transparency improves investment efficiency and increases growth by alleviating information asymmetry. However, in countries with insecure property rights, greater transparency can increase the risk of government expropriation and lower the benefits of transparency. Using data from 59 industries in 69 countries, we find that in countries with weak property rights protection, industries that would benefit the most from transparency exhibit worse investment efficiency, grow slower, practice worse governance and have less informative earnings compared to industries that can efficiently operate at minimal levels of transparency.

Keywords: Transparency, Investment Efficiency, Growth, Property Rights

JEL Classification: G30, G15

Suggested Citation

Durnev, Artyom and Errunza, Vihang R. and Molchanov, Alexander, Property Rights Protection, Corporate Transparency, and Growth (February 25, 2009). Available at SSRN: https://ssrn.com/abstract=1349403 or http://dx.doi.org/10.2139/ssrn.1349403

Artyom Durnev

University of Iowa - Henry B. Tippie College of Business ( email )

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Vihang R. Errunza

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
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Canada
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Alexander Molchanov (Contact Author)

Massey University ( email )

Auckland
New Zealand

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