The influence of information asymmetry on the interaction between voluntary corporate disclosure and cost of equity: evidence from publicly traded Indian enterprises

IF 1.3 Q1 LAW
A. Bhatia, Amanjot Kaur
{"title":"The influence of information asymmetry on the interaction between voluntary corporate disclosure and cost of equity: evidence from publicly traded Indian enterprises","authors":"A. Bhatia, Amanjot Kaur","doi":"10.1108/ijlma-05-2023-0120","DOIUrl":null,"url":null,"abstract":"\nPurpose\nThe purpose of this paper is to investigate whether information asymmetry mediates the relationship between disclosure and cost of equity.\n\n\nDesign/methodology/approach\nThe study is based on a sample of 500 companies listed in Bombay Stock Exchange for a period of six years from 2015 to 2021. Panel data regression is applied to analyze the relationship between voluntary disclosure, cost of equity and information asymmetry. Mediation effect of information asymmetry is tested with the help of Barron and Kenny’s (1986) approach.\n\n\nFindings\nFindings suggest that in case of Indian companies, disclosure reduces cost of equity directly and indirectly through mediation of information asymmetry. Indian investors value credible information for better estimation of future returns, supporting the validity of estimation risk and stock market liquidity hypothesis, which proposes an inverse relationship between disclosure and cost of equity.\n\n\nResearch limitations/implications\nManagers can use the findings to strategize their disclosure policy and secure funds at lower cost. Shareholders can monitor managerial actions by demanding credible disclosures. Government too can encourage voluntary disclosure by providing special incentives to the firms.\n\n\nOriginality/value\nThis study is a pioneering research that investigates the mediating influence of information asymmetry between disclosure and cost of equity with reference to the Indian corporate landscape.\n","PeriodicalId":46125,"journal":{"name":"International Journal of Law and Management","volume":null,"pages":null},"PeriodicalIF":1.3000,"publicationDate":"2023-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Law and Management","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1108/ijlma-05-2023-0120","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"LAW","Score":null,"Total":0}
引用次数: 0

Abstract

Purpose The purpose of this paper is to investigate whether information asymmetry mediates the relationship between disclosure and cost of equity. Design/methodology/approach The study is based on a sample of 500 companies listed in Bombay Stock Exchange for a period of six years from 2015 to 2021. Panel data regression is applied to analyze the relationship between voluntary disclosure, cost of equity and information asymmetry. Mediation effect of information asymmetry is tested with the help of Barron and Kenny’s (1986) approach. Findings Findings suggest that in case of Indian companies, disclosure reduces cost of equity directly and indirectly through mediation of information asymmetry. Indian investors value credible information for better estimation of future returns, supporting the validity of estimation risk and stock market liquidity hypothesis, which proposes an inverse relationship between disclosure and cost of equity. Research limitations/implications Managers can use the findings to strategize their disclosure policy and secure funds at lower cost. Shareholders can monitor managerial actions by demanding credible disclosures. Government too can encourage voluntary disclosure by providing special incentives to the firms. Originality/value This study is a pioneering research that investigates the mediating influence of information asymmetry between disclosure and cost of equity with reference to the Indian corporate landscape.
信息不对称对公司自愿披露与股权成本相互作用的影响:来自印度上市企业的证据
目的研究信息不对称是否在信息披露与权益成本之间起中介作用。设计/方法/方法该研究基于在孟买证券交易所上市的500家公司的样本,为期六年 2015年至2021年。运用面板数据回归分析了自愿披露、股权成本和信息不对称之间的关系。借助Barron和Kenny(1986)的方法检验了信息不对称的中介效应。研究结果表明,就印度公司而言,披露通过信息不对称的中介直接或间接降低了股权成本。印度投资者重视可信信息,以更好地估计未来回报,这支持了估计风险和股市流动性假设的有效性,该假设提出了披露与股权成本之间的反比关系。研究局限性/含义经理可以利用研究结果制定披露政策,以更低的成本获得资金。股东可以通过要求可靠的披露来监督管理层的行为。政府也可以通过向公司提供特殊激励来鼓励自愿披露。独创性/价值这项研究是一项开创性的研究,旨在参考印度企业的情况,调查信息不对称在披露和股权成本之间的中介影响。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 求助全文
来源期刊
CiteScore
3.90
自引率
6.70%
发文量
13
期刊介绍: The International Journal of Law and Management is a leading journal addressing all aspects of regulation and law as they impact on organisational development, operations and leadership. Organisations and their leaders operate in an increasingly complex world of emerging regulation across national and international boundaries. The International Journal of Law and Management seeks to acknowledge the dynamics of that environment and provide a platform for articles and contributions to stimulate scholarly debate in the development of law and practice. The International Journal of Law and Management seeks to present the latest research on policy, practice and theoretical perspectives and their impact on the development and leadership of organisations. Contributions of a multi-disciplinary nature are welcome. Coverage includes, but is not limited to: -Employment and industrial law- Corporate governance and social responsibility- Intellectual property- Corporate law and finance- Insolvency- Commercial law and consumer protection- Environmental law- Taxation- Competition law- Regulatory theory
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
确定
请完成安全验证×
copy
已复制链接
快去分享给好友吧!
我知道了
右上角分享
点击右上角分享
0
联系我们:info@booksci.cn Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。 Copyright © 2023 布克学术 All rights reserved.
京ICP备2023020795号-1
ghs 京公网安备 11010802042870号
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术官方微信