An Empirical Study of the Impact of Internet Financial Reporting on Stock Prices

Abstract

This study examines the economic consequences of internet financial reporting (IFR) in Taiwan. The results show that the stock prices of IFR firms change more quickly than those of the non-IFR firms using Akaike's (1969) Final Prediction Error (FPE) methodology. Second, the results from the event study methodology show that the cumulative abnormal returns of the firms with IFR are significantly higher than those of the firms without IFR. Lastly, the results indicate that firms with a higher degree of information transparency yield a higher abnormal return on their stock prices.

Effect of Internet Financial Reporting and Company Size on Stock Trading Volume at Lq45 Company in Indonesia Stock Exchange

“…Furthermore, other research examines the relationship between IFR and stocks, ie abnormal returns from company stock. This research revealed that the better disclosure of information made by the company, the greater the effect on stock prices (Lai et al 2010;Ashbaugh, Johnstone, and Warfield 1999). The same research concluded that large companies tend to provide better information disclosure than small firms (Bozcuk, 2012, Borisova, & Parnikova, 2016.…”

“…IFR is the inclusion of corporate financial information through the internet or website (Lai et al 2010). IFR is a form of voluntary disclosure in financial reporting.…”

“…The form of corporate financial information disclosure through the internet is called Internet Financial Reporting (IFR). IFR is the inclusion of corporate financial information through the internet or website (Lai et al 2010). IFR is a voluntary form of corporate disclosure.…”

E-Readiness Framework for Corporate Online Reporting

“…As prior studies have documented, there is a clear variation in the level of COR practices among countries (see for instance: Ettredge et al (2002), Andrikopoulos (2007), Despina and Demetrios (2009), Lai et al (2010) and Verma (2010)). This variation can be explained as follows: the implementation of COR in any country addresses several aspects that should be considered as challenges such as the technology aspect, countries' and companies' infrastructures, human skills, attitudes towards technology, and organizational aspect.…”

“…In response to these challenges, corporate online reporting (COR) as a communication tool has emerged to interact with stakeholders (Jones and Xiao, 2003;Xiao et al, 2002). Various recent studies have investigated COR (see for instance Ettredge et al (2002), Oyelere et al (2003), Marston (2003), Marston and Polei (2004), Al-Htaybat and Napier (2006), Momany and Al-Shorman (2006), Andrikopoulos (2007), Bozcuk et al (2008), Desoky (2009), Despina and Demetrios (2009), Lai et al (2010), Verma (2010), Aly et al (2010), Al-Hayale (2010), Aziz and Salleh, 2011) but none of these have addressed the readiness of companies in terms of electronic aspects to adopt COR, otherwise referred to as e-readiness.…”