scholarly journals Carbon Information Disclosure, Marketization, and Cost of Equity Financing

2019 ◽  
Vol 16 (1) ◽  
pp. 150 ◽  
Author(s):  
Li Li ◽  
Quanqi Liu ◽  
Jun Wang ◽  
Xuefei Hong
Keyword(s):  
Negative Correlation ◽  
Information Disclosure ◽  
Cost Of Equity ◽  
Equity Financing ◽  
Heavy Pollution ◽  
The Cost ◽  
The Relationship

Using listed enterprises in China’s heavy pollution industry from 2009 to 2013, this study tests the relationship between marketization degree, carbon information disclosure, and the cost of equity financing. The results show that, regardless of marketization degree, the overall level of carbon information disclosure of listed enterprises in China’s heavy pollution industry is low. The content of carbon information disclosure is mainly non-financial carbon information, and the financial carbon information disclosure is very low. The cost of equity financing is different in areas with different marketization degrees, specifically speaking, the cost of equity financing is lower in regions with a high marketization degree than that of a low marketization degree. Carbon information disclosure, non-financial carbon information disclosure, and financial carbon information disclosure are negatively correlated with the cost of equity financing. The marketization degree has strengthened the negative correlation between carbon information disclosure, non-financial carbon information disclosure, financial carbon information disclosure, and the cost of equity financing, respectively.

Does More Voluntary “Green” Information Disclosure Cut Down the Cost of Equity: Heavy Pollution Industries in China

2021 ◽  
Author(s):  
Lv Wendai ◽  
Feng Jing ◽  
Li Bin
Keyword(s):  
Voluntary Disclosure ◽  
Information Disclosure ◽  
Positive Impact ◽  
Environmental Information ◽  
Cost Of Equity ◽  
Equity Financing ◽  
Positive Effects ◽  
Heavy Pollution ◽  
Csr Disclosure ◽  
The Cost

Abstract Focusing on the unique background of the coexistence of mandatory and voluntary disclosure of environmental information by domestic companies in heavy pollution industries for which is lost sight of in the existing literature. The purpose of this paper is to identify, under the premise of compulsory disclosure of environmental information in the financial report and separate environmental report, whether the further voluntary environmental information disclosure in the corporate social responsibility (CSR_E) captures the discount from investors during equity financing. Employing the sample of 4390 China’s A-share listed companies in the heavy pollution industries between 2010 and 2018, we adopt Python to conduct texture analysis and image recognition, applying the fixed effect regression model to text hypothesizes, within the robust analysis, our empirical results show that the CSR disclosure, higher quality of CSR reports, greater extent of CSR_E disclosure including accurate environmental investment information as well as the amount of graphs and texts all have the positive impact on the cost reduction of equity financing. Moreover, the degree of CSR_E disclosure in reducing cost of equity is 30 times that of CSR disclosure, which indicates that voluntary disclosure of environmental information is better to get extra discount of equity financing by satisfying favor of investors instead of keep silent on the basis of compulsory disclosure of environmental information. In addition, the charts have specific positive effects that’s not available for the text, the accurate quantitative environmental information creates more values for those enterprises disclosed. This study offers guidelines for regulatory authorities to explore the coordination effect of mandatory and voluntary disclosure policies, and achieve environmental governance and sustainable development of enterprises by improving their corporate governance.

scholarly journals Risk Disclosure and Cost of Equity: A Bayesian Approach

Revista CEA ◽  
2020 ◽  
Vol 6 (11) ◽  
pp. 25-43
Author(s):  
Jose Miguel Tirado-Beltrán ◽  
José David Cabedo ◽  
Dennis Esther Muñoz-Ramírez
Keyword(s):  
Information Disclosure ◽  
Stock Exchange ◽  
Risk Information ◽  
Financial Risks ◽  
Risk Disclosure ◽  
Cost Of Equity ◽  
Global View ◽  
Bayesian Linear Regression ◽  
The Cost ◽  
The Relationship

This paper aims to analyze the relationship between risk information disclosure and the cost of equity of companies in the Spanish capital market. This study uses a set of 71 firms listed on Madrid stock exchange between 2010 and 2015; all of them are non-financial listed companies for which profit forecasts existed. The problem was analyzed using a Bayesian linear regression approach. The results show that cost of equity and disclosed risk information are not related if a global view of the latter is adopted. However, a positive relationship between financial risks and the cost of equity occurs when risk information is divided into financial and non-financial risks.

scholarly journals Analyst Following, Environmental Disclosure and Cost of Equity: Research Based on Industry Classification

2019 ◽  
Vol 11 (2) ◽  
pp. 300 ◽  
Author(s):  
Sheng Yao ◽  
Haotian Liang
Keyword(s):  
Least Squares ◽  
Information Disclosure ◽  
Ordinary Least Squares ◽  
Environmental Information ◽  
Mediating Effect ◽  
Cost Of Equity ◽  
Environmental Disclosure ◽  
Analyst Following ◽  
Environmental Information Disclosure ◽  
The Cost

Prior studies argue that an analyst is an important mediator between a firm and investors, and has a significant influence on the cost of equity. However, how analyst following influences the cost of equity has not been studied in depth. In the Chinese setting, where environmental information has attracted much attention, we explore the interaction among analyst following, environmental information disclosure, and cost of equity. With two linear regression methods of ordinary least squares (OLS) and two-Stage least squares (2SLS), we establish regressions to verify the relationships among them by using empirical data from 2004 to 2011 in China. The results show that analyst following can improve environmental information disclosure and lower the cost of equity. This interaction is more significant in the heavy-pollution industry and after new environmental policy is issued. We also find that environmental disclosure has a mediating effect, which determines how analyst following influences the cost of equity. The results expand the research on environmental information’s motivations and economic consequences.

Research on Relationship between Information Disclosure and Cost of Equity Capital for Small and Medium-Sized Enterprises

2013 ◽  
Vol 462-463 ◽  
pp. 833-836
Author(s):  
Yan Yu Zhang
Keyword(s):  
Information Disclosure ◽  
Economic Condition ◽  
Multiple Regression Model ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Earnings Information ◽  
Residual Income Model ◽  
Income Model ◽  
The Cost

Relationship between information disclosure and the cost of equity capital for small and medium-sized enterprises was studied by calculating the cost of equity capital using the residual income model. A multiple regression model was built considering economic condition in China. It was found that earnings information may help the small and medium-sized enterprise to reduce the cost of equity capital. One important motivation was that significant positive correlation was seen between financial leverage and the small and medium-sized enterprises cost of equity capital. Besides, negative correlation was seen between enterprise scale and the small and medium-sized enterprises cost of equity capital.

Corporate governance and cost of equity: empirical evidence from Latin American companies

2016 ◽  
Vol 16 (5) ◽  
pp. 831-848 ◽  
Author(s):  
Emanuele Teti ◽  
Alberto Dell’Acqua ◽  
Leonardo Etro ◽  
Francesca Resmini
Keyword(s):  
Corporate Governance ◽  
Latin American ◽  
Cost Of Capital ◽  
Negative Relationship ◽  
Developed Countries ◽  
Equity Capital ◽  
Cost Of Equity ◽  
Content Type ◽  
The Cost ◽  
The Relationship

Purpose This paper aims to investigate the extent to which corporate governance (CG) systems adopted by Latin American listed firms affect their cost of equity capital. Several studies on the link between the two aforementioned dimensions have been carried out, but none in the context of Latin American firms. Design/methodology/approach A CG index is created by taking into account the peculiarities of each country and the recommendations given by the corresponding CG institutes. In particular, to assess the level of CG quality, three sub-indexes have been identified: “Disclosure”, “Board of Directors” and “Shareholder Rights, Ownership and Control Structure”. Findings The results indicate a negative relationship between CG quality and the cost of equity. In particular, the “Disclosure” component is the one mostly affecting the cost of equity. Research limitations/implications This study contributes to the literature by adding knowledge on the relationship between CG and cost of capital considering, for the first time, the overall Latin American market. Practical implications The paper proves that institutional investors all over the world are disposed to pay a premium to invest in firms with effective CG standards; moreover, this premium is higher in emerging countries such as those analyzed in this paper, rather than in developed countries. Originality/value To the authors' knowledge, this is the first paper empirically investigating the relationship between CG and cost of capital in Latin America.

Governance Transparency and the Institutions of Capitalism

2014 ◽  
pp. 386-412
Author(s):  
Raj Aggarwal ◽  
John W. Goodell
Keyword(s):  
Transaction Costs ◽  
Capital Markets ◽  
Stock Markets ◽  
Corporate Ownership ◽  
Cost Of Equity ◽  
Financial Architecture ◽  
The Cost ◽  
Governance Transparency ◽  
Business Exchange ◽  
The Relationship

This chapter explores the relationship between governance transparency and institutions of capitalism. It considers two major components of governance transparency in a country: disclosure regarding self-dealing and disclosure regarding ultimate corporate ownership. It also examines the effects of governance transparency on some of the fundamental mechanisms of capitalism, including transaction costs and the institutions of business exchange. Some evidence of the importance of governance transparency in the structure of capital markets is presented. The chapter reviews how governance transparency is measured and how it influences the culture of equity, the cost of equity, participation in stock markets, and a nation’s financial architecture.

Sign in / Sign up

Export Citation Format

Share Document