2012
DOI: 10.1016/j.jacceco.2012.07.003
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Financial reporting frequency, information asymmetry, and the cost of equity

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Cited by 238 publications
(151 citation statements)
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“…In this regard, insider, or private, information is that information not yet disclosed to the general public, which can provide a competitive advantage in stock trading. Fu, Kraft and Zhang (2012) state that each financial report, in the broad sense, represents an opportunity to realize gains using private information, and the greater frequency of reports encourages the informed trader to acquire private information, thus increasing informational asymmetry. To Thevenot (2012), in the US market, the Sarbanes-Oxley Act is consistent with the concern that managers can negotiate using private information when the financial results are misrepresented.…”
Section: Introductionmentioning
confidence: 99%
“…In this regard, insider, or private, information is that information not yet disclosed to the general public, which can provide a competitive advantage in stock trading. Fu, Kraft and Zhang (2012) state that each financial report, in the broad sense, represents an opportunity to realize gains using private information, and the greater frequency of reports encourages the informed trader to acquire private information, thus increasing informational asymmetry. To Thevenot (2012), in the US market, the Sarbanes-Oxley Act is consistent with the concern that managers can negotiate using private information when the financial results are misrepresented.…”
Section: Introductionmentioning
confidence: 99%
“…Bid-ask spread is a commonly used proxy for information asymmetry and it is a direct measure of the cost of trading that is well established in prior literature (Leuz and Verrecchia 2000;Leuz 2003;Mohd 2005;Fu et al 2012). The bid-ask spread addresses the adverse selection problem that arises from transactions in a firm's shares in the presence of asymmetrically informed investors (Leuz and Verrecchia 2000).…”
Section: Dependent Variablesmentioning
confidence: 99%
“…Botosan, 1997;Cao, Myers, Tsang, & Yang, 2014). Botosan (1997) found that voluntary disclosure only reduces the ke of companies with low analyst coverage; Fu, Kraft and Zhang (2012), among other studies, provided evidence that more timely disclosure (as is the case with social networks, for example) is able to reduce ke. Cao et al (2014) showed that forecasts, made by company management, are also able to reduce ke, provided investors are protected.…”
Section: Introductionmentioning
confidence: 95%