Campus Units

Accounting

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

Summer 2019

Journal or Book Title

Journal of International Accounting Research

Volume

18

Issue

2

First Page

89

Last Page

113

DOI

10.2308/jiar-52383

Abstract

We examine changes in stock price informativeness following the European Union's Transparency Directive (TPD). The TPD, implemented by country between 2007 and 2009, enhanced corporate transparency through mandating regular firm financial disclosures and facilitating the dissemination of financial reports. Using stock return synchronicity as a proxy for stock price informativeness, we find that price informativeness improved following implementation of the TPD. This improvement was more pronounced in countries with strong regulatory environments than those with weak regulatory environments. We additionally examine a later amendment to the TPD that eliminated the requirement of quarterly financial disclosures and document an increase in stock return synchronicity following the amendment. Our findings support prior research suggesting that transparency regulations improve financial information.

Comments

This accepted article is published as Olena V. Watanabe, Michael J Imhof, and Semih Tartaroglu (2019) Transparency Regulation and Stock Price Informativeness: Evidence from the European Union's Transparency Directive. Journal of International Accounting Research: Summer, Vol. 18, No. 2, pp. 89-113. Doi: 10.2308/jiar-52383. Posted with permission

Copyright Owner

American Accounting Association

Language

en

File Format

application/pdf

Published Version

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