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Does accounting comparability alleviate the informational disadvantage of foreign investors?
, Yogesh Chauhan
Published in Elsevier BV
Volume: 60
Pages: 114 - 129
The paper examines the benefits of financial accounting comparability for an emerging market. We document the benefits in the form of foreign equity investments. Our empirical results find that foreign investors prefer to invest in firms showing more accounting comparability. Our results also reveal that the benefits of accounting comparability are more prominent when firms have less visibility, operate in a less competitive industry, and have stock prices that reflect a lower level of firm-specific information. We further find that the effect of accounting comparability is lower for domestic mutual fund ownership. Overall, our study suggests that accounting comparability can complement a poor information environment concerning emerging market firms.
About the journal
JournalData powered by TypesetInternational Review of Economics & Finance
PublisherData powered by TypesetElsevier BV
Open AccessNo