Web-Based Non-Financial Disclosure and Cost of Finance

37 Pages Posted: 1 Jan 2011

See all articles by Raf Orens

Raf Orens

Catholic University of Louvain (UCL) - Lessius University College

Walter Aerts

University of Antwerp

Denis Cormier

University du Quebec a Montreal

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Abstract

We study the association of Web-based non-financial disclosure and a firm's cost of finance within an international context (North America and Continental Europe). We examine voluntary Web placement of non-financial disclosures using an information index covering a firm's value creation process. We find a negative association between the level of Web-based non-financial disclosure and the implied cost of equity capital in North America and in Continental Europe. Continental European firms with higher levels of Web-based non-financial disclosure also tend to benefit from a lower information asymmetry and from a lower cost of debt capital, whereas North American firms do not.

Keywords: Continental Europe, cost of debt capital, implied cost of equity capital, endogeneity, cost of finance, information asymmetry, Internet reporting, non-financial disclosure, North America, Web disclosure

Suggested Citation

Orens, Raf and Aerts, Walter and Cormier, Denis, Web-Based Non-Financial Disclosure and Cost of Finance. Journal of Business Finance & Accounting, Vol. 37, Nos. 9-10, pp. 1057-1093, 2010. Available at SSRN: https://ssrn.com/abstract=1733378 or http://dx.doi.org/10.1111/j.1468-5957.2010.02212.x

Raf Orens (Contact Author)

Catholic University of Louvain (UCL) - Lessius University College ( email )

Department of Business Studies
Korte Nieuwstraat 33
Antwerp, 2000
Belgium

Walter Aerts

University of Antwerp ( email )

Prinsstraat 13
Antwerpen, B-2000
Belgium
003232654110 (Phone)
003232654064 (Fax)

Denis Cormier

University du Quebec a Montreal ( email )

P.O. Box 8888, Downtown Station
Succursale Centre Ville School of Management 315 rue Ste-Catherine Est
Montreal, Quebec H3C 3P8
Canada
514-987-3000, ext. 8358 (Phone)
514-987-6629 (Fax)

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