50 Pages Posted: 30 Aug 2003
Date Written: April 2003
We investigate corporate transparency, defined as the availability of firm-specific information to those outside publicly traded firms, and viewed as the joint output of multi-faceted systems whose components collectively produce, gather, validate and disseminate information to market participants. We factor analyze an extensive range of measures capturing countries' firm-specific information environments, and isolate two factors interpreted as financial transparency and governance transparency. We investigate whether these factors vary with the countries' legal/judicial regimes and political economies. Our main multivariate result is that the governance transparency factor is primary related to a country's legal/judicial regime, while the financial transparency factor is primarily related to political economy.
Keywords: corporate transparency, international accounting, corporate governance, disclosure, law, political economy
JEL Classification: G15, G34, K22, M41, M45, M47
Suggested Citation: Suggested Citation
Bushman, Robert M. and Piotroski, Joseph D. and Smith, Abbie J., What Determines Corporate Transparency? (April 2003). Available at SSRN: https://ssrn.com/abstract=428601 or http://dx.doi.org/10.2139/ssrn.428601