The Relationship between Voluntary Disclosure, External Financing and Financial Status

25 Pages Posted: 22 Oct 2015

See all articles by Håkan Jankensgård

Håkan Jankensgård

Lund University - Department of Business Administration; Knut Wicksell Centre for Financial Studies

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Date Written: September/October 2015

Abstract

Using unique Swedish disclosure data from 2007 to 2012, this paper reports three important sets of findings with regard to the relationship between firms’ voluntary disclosure, external financing and financial status. First, financially strong firms disclose more than weaker ones. Second, firms that obtain new financing (equity or debt) disclose more than firms that do not. Third, the association between voluntary disclosure and financing events is stronger in financially weak firms. This last finding is new in the literature. Perhaps financially weak firms that obtain external funding have higher disclosure to counteract contracting and valuation problems in the financial markets.

Keywords: voluntary disclosure, financial status, external financing, equity issuance, debt overhang

Suggested Citation

Jankensgård, Håkan, The Relationship between Voluntary Disclosure, External Financing and Financial Status (September/October 2015). Journal of Business Finance & Accounting, Vol. 42, Issue 7-8, pp. 860-884, 2015. Available at SSRN: https://ssrn.com/abstract=2677421 or http://dx.doi.org/10.1111/jbfa.12120

Håkan Jankensgård (Contact Author)

Lund University - Department of Business Administration ( email )

Box 117
SE-221 00 Lund, S-220 07
Sweden

Knut Wicksell Centre for Financial Studies ( email )

Box 7080
Lund, SE-220 07
Sweden

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