CORPORATE DISCLOSURE AND COST OF EQUITY : CASE OF MALAYSIAN LISTED COMPANIES
Prior studies argue that information costs firm’s capital due to the information asymmetry, and most of those research papers investigated develop countries. Malaysia, as an emerging market, offers its unique characteristic in terms of financial reporting regulation and is hugely influence...
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| Main Authors: | , , |
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| Format: | Proceeding |
| Language: | en |
| Published: |
2014
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| Subjects: | |
| Online Access: | http://ir.unimas.my/id/eprint/43194/1/sdps2014_submission_77.pdf http://ir.unimas.my/id/eprint/43194/ |
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| Summary: | Prior studies argue that information costs firm’s
capital due to the information asymmetry, and most of
those research papers investigated develop countries.
Malaysia, as an emerging market, offers its unique
characteristic in terms of financial reporting regulation
and is hugely influence by export-oriented firms.
Therefore, this research aims to investigate whether
information disclosure may affect the cost of equity of
firms. We investigate this hypothesis by using all
Malaysian listed firms excluding the finance, services, and
utilities companies over 3 years period of 2010-2012. We
use robust panel regression where the values are based on
White robust standard errors that control for
heterocedasticity errors. Overall, our findings are
consistent with previous research that higher level of
disclosure might discount the firm’s cost of equity,
suggesting that firms should disclose more information for
better cost of capital. At the end of our research, we
explain our findings using two perspectives which are:
information cost and agency cost. |
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