Foundations and Trends® in Accounting > Vol 5 > Issue 3

Economic Effects of Transparency in International Equity Markets: A Review and Suggestions for Future Research

Mark Lang, University of North Carolina, USA, Mark_Lang@unc.edu Mark Maffett, University of North Carolina, USA, maffett@unc.edu
 
Suggested Citation
Mark Lang and Mark Maffett (2011), "Economic Effects of Transparency in International Equity Markets: A Review and Suggestions for Future Research", Foundations and TrendsĀ® in Accounting: Vol. 5: No. 3, pp 175-241. http://dx.doi.org/10.1561/1400000016

Published: 08 Jun 2011
© 2011 M. Lang and M. Maffett
 
Subjects
Taxation
 
Keywords
TransparencyLiquidity riskInternational equity marketsAsset expropriation
 

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In this article:
1. Introduction and Overview
2. Why International Equity?
3. The Economic Effects of Transparency
4. Challenges and Directions for Future Research
5. Conclusions
References

Abstract

In this monograph, we discuss the existing literature on the economic effects of transparency in international equity markets, present aspects of an international setting that make it a fruitful environment for investigating these effects and suggest directions for future research.

DOI:10.1561/1400000016
ISBN: 978-1-60198-448-7
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ISBN: 978-1-60198-449-4
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Table of contents:
1. Introduction and Overview
2. Why International Equity?
3. The Economic Effects of Transparency
4. Directions for Future Research
5. Conclusions

Economic Effects of Transparency in International Equity Markets

Economic Effects of Transparency in International Equity Markets reviews the existing accounting, finance and economics literatures on the economic effects of transparency in international equity markets, considers aspects of an international setting that make it an interesting environment for investigating these effects, and suggests directions for future research. The authors focus on the availability of firm-specific financial information to equity stakeholders and the effects of the quantity and quality of that information on own-firm equity value. Drawing from the FASB/IASB conceptual framework, this monograph defines high quality financial information as information that both faithfully represents the substance of an underlying phenomenon and can be understood by users of that information.

Economic Effects of Transparency in International Equity Markets focuses on an international context to investigate the effects of transparency because overall levels of transparency tend to be low, there is substantial cross-country institutional and regulatory variation and managers and regulators in these environments face significant tradeoffs in determining optimal transparency levels. Although this variation can sometimes complicate the researcher's effort to make inferences across different institutional environments, the authors highlight how these differences can be exploited to identify potential disclosure and informational effects that may be too subtle to detect in more homogenous, single-country, settings and to understand the interactions between transparency and other aspects of the firm's economic environment.

 
ACC-016