Do Better-Governed Firms Make More Informative Disclosures? Canadian Evidence

28 Pages Posted: 7 Feb 2006

See all articles by Wendy Beekes

Wendy Beekes

Lancaster University - Department of Accounting and Finance

Philip R. Brown

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

Germaine Chin

The University of Western Australia - Faculty of Economics & Commerce

Date Written: May 2007

Abstract

We investigate the link between the informativeness of corporate disclosures and firms' corporate governance structures. Using a Canadian sample of firms rated in the November 2004 Board Shareholder Confidence Index, we examine whether corporate governance is a significant influence on the frequency of a firm's disclosures, on analyst behaviour and on the timeliness of price discovery. We find Canadian firms with better governance structures release more documents to the stock market. These firms also attract a larger following of analysts, and their share prices integrate value-relevant information more rapidly. Overall our results confirm other evidence suggesting corporate governance can play a significant role in determining the efficiency of a country's equity market.

Keywords: Corporate governance quality, Disclosure frequency, Analysts' forecasts, Price discovery, Timeliness

JEL Classification: G30, G38, M40

Suggested Citation

Beekes, Wendy and Brown, Philip R. and Chin, Germaine, Do Better-Governed Firms Make More Informative Disclosures? Canadian Evidence (May 2007). Available at SSRN: https://ssrn.com/abstract=881062 or http://dx.doi.org/10.2139/ssrn.881062

Wendy Beekes (Contact Author)

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

Germaine Chin

The University of Western Australia - Faculty of Economics & Commerce ( email )

Nedlands, Western Australia 6907
Australia

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