Has the Transparency Directive benefited the United Kingdom?

IF 3.3 Q1 BUSINESS, FINANCE

Journal of International Accounting Auditing and Taxation Pub Date : 2024-06-26 DOI:10.1016/j.intaccaudtax.2024.100633

Sheehan Rahman

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Abstract

Post Brexit, this study contributes to assessing the efficacy of the European Union (EU) Transparency Directive (TPD) in attaining its regulator-specified goals for the United Kingdom (UK) capital market. During its adoption in 2004, the Commission of European Communities and the UK Government argued that TPD adoption should increase firms’ financial reporting quality and investment efficiency while decreasing firms’ cost of capital and information asymmetry. Using several alternative test variables in a sample of FTSE All-Share Index firms, I find evidence consistent with these four goals following TPD adoption. Additionally, I find that firms have lower cash holdings and higher dividend payouts following TPD adoption. Most of these trends do not reverse after the 2014 TPD amendment that abolished mandatory quarterly trading updates. This is the first study to examine the association between TPD adoption and firms’ cost of capital, investment efficiency, cash holdings, and dividend payout. Collectively, my results suggest that the primary regulatory goals of the TPD are being attained in the UK. Therefore, a case can be made for the relevance of the TPD and the resulting Disclosure and Transparency Rules in UK post Brexit.

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透明度指令》是否使联合王国受益？

英国脱欧后，本研究有助于评估《欧盟透明度指令》（TPD）在实现监管机构为英国资本市场规定的目标方面的功效。在 2004 年通过该指令时，欧洲共同体委员会和英国政府认为，采用《透明度指令》应提高企业的财务报告质量和投资效率，同时降低企业的资本成本和信息不对称。我在富时全股指数公司样本中使用了几个可供选择的测试变量，发现采用 TPD 后与这四个目标相一致的证据。此外，我还发现，在采用贸易保护政策后，企业的现金持有量减少，股息支付增加。在 2014 年 TPD 修订案取消强制季度交易更新后，这些趋势大多没有逆转。这是首次研究采用 TPD 与企业的资本成本、投资效率、现金持有量和股息支付之间的关系。总体而言，我的研究结果表明，英国正在实现 TPD 的主要监管目标。因此，英国脱欧后，《贸易政策文件》及由此产生的《信息披露与透明度规则》仍有其现实意义。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of International Accounting Auditing and Taxation BUSINESS, FINANCE-

CiteScore

4.50

自引率

3.80%

发文量

期刊介绍： The Journal of International Accounting, Auditing and Taxation publishes articles which deal with most areas of international accounting including auditing, taxation and management accounting. The journal''s goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting. Submissions are expected to make a contribution to the accounting literature, including as appropriate the international accounting literature typically found in JIAAT and other primary US-based international accounting journals as well as in leading European accounting journals. Applied research findings, critiques of current accounting practices and the measurement of their effects on business decisions, general purpose solutions to problems through models, and essays on world affairs which affect accounting practice are all within the scope of the journal.