Do Better-Governed Australian Firms Make More Informative Disclosures?
29 Pages Posted: 25 May 2006
We investigate whether and if so, how, corporate governance quality is related to the information flows from a company and how the share 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 six indicators of informativeness. They include document counts, properties of analysts forecasts and a timeliness metric, in the spirit of Ball and Brown (1968), that reflects 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.
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