Meta‐analytic review of disclosure level and cost of equity capital
International Journal of Accounting & Information Management
ISSN: 1834-7649
Article publication date: 24 February 2012
Abstract
Purpose
The purpose of this paper is to meta‐analyze the results of 22 empirical studies that examine the relationship between voluntary disclosure and cost of equity capital. The authors examine whether differences in results are attributable to moderating effects related to disclosure environment, the measurement of the disclosure score and the proxy used to measure the cost of equity capital.
Design/methodology/approach
The approach used is the meta‐analysis statistic technique developed by Hunter et al.
Findings
The results emphasize the need to explicitly consider the legal and institutional aspects (high disclosure environment versus low disclosure environment) when one analyzes the association between disclosure level and cost of equity capital.
Originality/value
Since the authors' analysis confirms the negative association between disclosure and cost of equity capital in countries characterized by low disclosure environment, managers in these contexts are encouraged to make more voluntary disclosure in order to reduce uncertainty among investors and increase the marketability of their securities.
Keywords
Citation
Souissi, M. and Khlif, H. (2012), "Meta‐analytic review of disclosure level and cost of equity capital", International Journal of Accounting & Information Management, Vol. 20 No. 1, pp. 49-62. https://doi.org/10.1108/18347641211201072
Publisher
:Emerald Group Publishing Limited
Copyright © 2012, Emerald Group Publishing Limited