Financial Integration and the Transparency of Firms in Emerging Capital Markets

34 Pages Posted: 30 Oct 2012 Last revised: 17 Jul 2014

See all articles by Qiyu Zhang

Qiyu Zhang

Lancaster University Management School

Wendy Beekes

Lancaster University - Department of Accounting and Finance

Philip R. Brown

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

Date Written: July 1, 2014

Abstract

We examine the association between financial integration and capital market transparency of emerging-market firms. We use four intra-year price timeliness measures derived from the Beekes and Brown (2006, 2007) methods as indicators of the firm’s transparency. The sample comprises 57,465 firm-year observations on listed companies in 24 emerging economies over the period 1995-2010. As expected, we find that greater financial integration is associated with greater transparency, and that the effect is more pronounced when the news about the firm is bad. Using structural equation modelling (SEM), we find evidence of a mechanism through which financial integration enhances the information environment: improved corporate governance.

Keywords: Financial integration; transparency; emerging markets

JEL Classification: F36; G14; G15; G30

Suggested Citation

Zhang, Qiyu and Beekes, Wendy and Brown, Philip R., Financial Integration and the Transparency of Firms in Emerging Capital Markets (July 1, 2014). Available at SSRN: https://ssrn.com/abstract=2168243 or http://dx.doi.org/10.2139/ssrn.2168243

Qiyu Zhang (Contact Author)

Lancaster University Management School ( email )

Bailrigg
Lancaster, LA1 4YX
United Kingdom

Wendy Beekes

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

Register to save articles to
your library

Register

Paper statistics

Downloads
93
rank
271,881
Abstract Views
729
PlumX Metrics