Financial reporting frequency, information asymmetry, and the cost of equity

The purpose of this research is to find out the relationship between the frequency of interim financial reporting with information asymmetry and cost of equity for issuers in the Jakarta Islamic Index for the period 2012 to 2018. Research findings on 84 companies, namely (1) there is no relationship between the frequency of interim financial reporting with information asymmetry (2 ) there is no relationship between the frequency of interim financial reporting with the cost of equity. The absence of this relationship is caused by (1) interim financial reporting frequency data that are not different between issuers (2) research settings.

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Information Asymmetry, Ownership Structure and Cost of Equity Capital: The Formation for Open Innovation

Journal of Open Innovation Technology Market and Complexity ◽

10.3390/joitmc7010048 ◽

2021 ◽

Vol 7 (1) ◽

pp. 48

Author(s):

Ade Imam Muslim ◽

Doddy Setiawan

Keyword(s):

Stock Market ◽

Information Asymmetry ◽

Ownership Structure ◽

Trading Volume ◽

Foreign Ownership ◽

Equity Capital ◽

Cost Of Equity Capital ◽

Cost Of Equity ◽

Ownership Structures ◽

The Cost

Our study aims to investigate how information asymmetry and ownership structure affect cost of equity capital. For that purpose, we collected 246 issuers over 4 years for a total of 984 observations. By using panel data processing, we found that the information asymmetry we proxied through Price non-Synchronization and trading volume had an effect on the cost of equity capital. Our results also confirmed both Agency Theory and Pecking Order Theory. Both theories are in line with the conditions of the stock market in Indonesia. In addition, we found that institutional and foreign ownership structures also had an effect on the cost of equity capital. Furthermore, our results also confirmed Interest Alignment Theory and Entrenchment Theory. Our research is expected to contribute to the debate on the existence of information asymmetry and ownership structures in relation to the cost of equity capital. We also hope that it will be a valuable input for investors in considering their investment. Moreover, from the results of this study, investors can also consider foreign ownership or institutional ownership in determining their investment. In addition, stock market regulators in Indonesia can develop approaches to minimize information asymmetry and encourage foreign investors to invest in Indonesia.

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Do Temporary Increases in Information Asymmetry Affect the Cost of Equity?

SSRN Electronic Journal ◽

10.2139/ssrn.1130667 ◽

2012 ◽

Cited By ~ 1

Author(s):

Shai Levi ◽

Xiao-Jun Zhang

Keyword(s):

Information Asymmetry ◽

Cost Of Equity ◽

The Cost

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Ambiguous Customer Identity Disclosure and the Cost of Equity Capital

Review of Pacific Basin Financial Markets and Policies ◽

10.1142/s0219091517500217 ◽

2017 ◽

Vol 20 (03) ◽

pp. 1750021 ◽

Cited By ~ 3

Author(s):

Hsin-Yi Yu ◽

Li-Wen Chen

Keyword(s):

Information Asymmetry ◽

Market Competition ◽

Equity Capital ◽

Cost Of Equity Capital ◽

Cost Of Equity ◽

Proprietary Information ◽

Customer Information ◽

Identity Disclosure ◽

The Cost ◽

Proprietary Cost

In deciding how much customer information to disclose, managers face a tradeoff between the benefits of reducing information asymmetry and the losses of revealing proprietary information. This paper investigates which factors affect the level of ambiguous customer identity disclosure and whether such ambiguous disclosure affects the cost of equity capital. The empirical evidence shows that the proprietary cost is a crucial factor in ambiguous customer identity disclosure. Firms with a higher level of ambiguous customer identity disclosure generate a higher cost of equity capital. Moreover, the higher cost of equity capital is concentrated among firms under imperfect market competition.

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Does IFRS adoption decrease the cost of equity of the global tourism firms?

Tourism Economics ◽

10.1177/1354816617715158 ◽

2017 ◽

Vol 23 (8) ◽

pp. 1615-1631

Author(s):

Zhi-Yuan Feng ◽

Ying-Chieh Wang ◽

Hua-Wei Huang

Keyword(s):

Financial Reporting ◽

Equity Capital ◽

Tourism Industry ◽

Cost Of Equity Capital ◽

Cost Of Equity ◽

Financial Reporting Standards ◽

Ifrs Adoption ◽

Legal Enforcement ◽

Global Tourism ◽

The Cost

This article answers the question of whether the adoption of International Financial Reporting Standards (IFRS) reduces the cost of equity capital, with a focus on the tourism industry. We employ a set of global tourism companies and find that mandatory IFRS adoption has a significantly negative relation with the cost of equity capital. However, we find that this relation is varied with different business cultures and geographic areas. Moreover, from interactive analyses of country institutions for the relation between mandatory IFRS adoption and tourism firm’s cost of equity, we show that adopting IFRS complements the deficiencies of various country institutions, such as investor protection, the strength of legal enforcement, and corporate governance.

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The Effect of Information Asymmetry and Business Diversification on Cost of Equity Capital

JASa (Jurnal Akuntansi, Audit dan Sistem Informasi Akuntansi) ◽

10.36555/jasa.v5i1.1486 ◽

2021 ◽

Vol 5 (1) ◽

pp. 104-112

Author(s):

Nurul Intan Okci Pratiwi

Keyword(s):

Information Asymmetry ◽

Positive Impact ◽

Stock Exchange ◽

Linear Regression Analysis ◽

Secondary Data ◽

Equity Capital ◽

Cost Of Equity Capital ◽

Cost Of Equity ◽

Quantitative Research Methods ◽

The Cost

This study aims to examine the effect of information asymmetry and business diversification on the cost of equity capital in mining companies listed in the Indonesia Stock Exchange with a sample of 14 companies for the 2017-2019 period. Data analysis used descriptive research with quantitative research methods in the form of secondary data. Information asymmetry is measured using the bid-ask spread and diversification is measured using the Herfindahl Index proxy while the cost of equity capital is measured using the Ohlson model. Hypothesis testing is carried out using multiple linear regression analysis to see how much influence information asymmetry and diversification have on the cost of equity capital. The result indicated that information asymmetry had a positive impact on the cost of equity capital and business diversification had a positive impact on the cost of equity capital.

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PENGARUH ASIMETRI INFORMASI DAN MANAJEMEN LABATERHADAP BIAYA MODAL EKUITAS PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA (BEI) TAHUN 2013-2015

EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis ◽

10.37676/ekombis.v6i1.431 ◽

2018 ◽

Vol 6 (1) ◽

Author(s):

Yudi Partama Putra

Keyword(s):

Earnings Management ◽

Information Asymmetry ◽

Stock Exchange ◽

Equity Capital ◽

Manufacturing Companies ◽

Cost Of Equity Capital ◽

Cost Of Equity ◽

Capital Costs ◽

The Cost ◽

Variable Information

Yudi Partama Putra; This study aims to (1) determine the effect of asymmetry of information on costs of equity at manufacturing companies listed in Indonesia Stock Exchange period 2013-2015, (2) know the effect of earnings management on equity capital costs at manufacturing companies listed on the Stock Exchange in 2013- 2015, (3) determine the effect of information asymmetry and earnings management simultaneously on the cost of equity capital in manufacturing companies listed on the Indonesian Stock Exchange 2013-2015. The population in this study is manufacturing company listed on the Indonesia Stock Exchange. While the sample selection is taken by using purposive sampling method. The classical assumption test used in this research is using normality test, multicollinearity test, heteroscedasticity test, and autocorrelation test. Analysis of data used to test the hypothesis is multiple linear regression analysis techniques. Based on the results of the research indicate that (1) information asymmetry has positive and significant effect to cost of equity (2) earnings management has no significant effect on Cost of equity. F test results show that the variable information asymmetry and earnings management simultaneously affect the cost of equity capital. The result of determination coefficient test with R square shows that variable information asymmetry and earnings management influence cost equity capital equal 10,7%, while the rest 89,3% influenced by other variables.Key Words: Information Asymetry, Earnings Management, and Cost Of Equity.

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The Influence of IFRS Adoption on Banks’ Cost of Equity: Evidence from European Banks

Sustainability ◽

10.3390/su12093535 ◽

2020 ◽

Vol 12 (9) ◽

pp. 3535

Author(s):

Sang-Giun Yim

Keyword(s):

Financial Reporting ◽

Banking System ◽

Accounting Standards ◽

Policy Implications ◽

Cost Of Equity ◽

Financial Reporting Standards ◽

Legal Enforcement ◽

Regulatory Standards ◽

The Stability ◽

The Cost

This study examines how mandatory adoption of International Financial Reporting Standards (IFRS) in European countries affects banks’ cost of equity. Supporters of IFRS argue that its adoption improves the quality of accounting information, which in turn decreases the cost of equity. However, banking regulators could intervene in the implementation of new accounting standards to protect the stability of the banking system, which would deteriorate banks’ information environment and thereby increase the cost of equity. Using a regression analysis of European listed bank data, I find that banks’ cost of equity increases after the adoption of IFRS in countries with strong bank supervisory offices. I also find that strong legal enforcement and additional disclosure requirements jointly reduce banks’ cost of equity, but pre-IFRS inconsistencies between local accounting standards and regulatory standards jointly increase banks’ cost of equity. This study contributes to the literature on market discipline in banking and has policy implications: The findings suggest that, when implementing new accounting standards, potential conflicts between financial reporting and banking regulations should be considered.

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