Does financial statement readability alleviate the informational disadvantage of foreign investors?

IF 2.1 Q2 BUSINESS, FINANCE

Pacific Accounting Review Pub Date : 2023-03-07 DOI:10.1108/par-05-2022-0070

Somya Arora, Yogesh Chauhan

引用次数: 0

Abstract

Purpose This paper aims to explore whether financial statement readability overcomes the information disadvantage of foreign equity investors. Design/methodology/approach A comprehensive data set of Indian firms listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) for 2007–2019 has been used to evaluate the proposed research questions. This study uses the Panel data method to investigate the research question. Findings The results reveal that readable financial statements attract foreign investments. The readability benefits are more noticeable for firms operating in less competitive industries and having poor earnings quality. Originality/value This study suggests that foreign investors facing informational disadvantages prefer firms with better readability as a substitute for informational acquisition, processing and monitoring.

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财务报表的可读性是否减轻了外国投资者的信息劣势?

目的探讨财务报表的可读性是否克服了外国股权投资者的信息劣势。设计/方法/方法已使用2007-2019年在国家证券交易所（NSE）和孟买证券交易所（BSE）上市的印度公司的综合数据集来评估拟议的研究问题。本研究采用面板数据法对研究问题进行调查。研究结果表明，可读的财务报表吸引了外国投资。可读性的好处对于那些在竞争力较低、盈利质量较差的行业运营的公司来说更为明显。原创性/价值这项研究表明，面临信息劣势的外国投资者更喜欢可读性更好的公司，作为信息获取、处理和监控的替代品。

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

Pacific Accounting Review BUSINESS, FINANCE-

CiteScore

3.80

自引率

9.50%

发文量

期刊介绍： Pacific Accounting Review is a quarterly journal publishing original research papers and book reviews. The journal is supported by all New Zealand Universities and has the backing of academics from many universities in the Pacific region. The journal publishes papers from both empirical and theoretical forms of research into current developments in accounting and finance and provides insight into how present practice is shaped and formed. Specific areas include but are not limited to: - Emerging Markets and Economies - Political/Social contexts - Financial Reporting - Auditing and Governance - Management Accounting.