Do Better-Governed Australian Firms Make More Informative Disclosures?
47 Pages Posted: 2 Feb 2005
Date Written: May 2005
We investigate whether and if so, how, corporate governance quality is related to the information flows from a company and how the stock market and its agents respond. Specifically, we study links between the quality of a firm's corporate governance (CGQ) and the informativeness of its disclosures. We employ a novel, intra-year timeliness metric, in the spirit of Ball and Brown (1968) and Brown et al. (1999), to capture the average speed of price discovery throughout the year. Our results suggest the answer to our question is Yes: better-governed firms do make more informative disclosures.
Keywords: Corporate governance quality, Disclosure frequency, Analysts' forecasts, Price discovery, Timeliness
JEL Classification: G34, G38, M41, M45
Suggested Citation: Suggested Citation