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Disclosure interactions and the cost of equity capital: evidence from the spanish continuous market

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dc.affiliation.dptoUC3M. Departamento de Economía de la Empresaes
dc.contributor.authorTrombetta, Marco
dc.contributor.authorEspinosa, Mónica
dc.date.accessioned2010-04-12T13:45:43Z
dc.date.available2010-04-12T13:45:43Z
dc.date.issued2007-12
dc.description.abstractThe purpose of this paper is to provide some new evidence on the relationship between disclosure and the cost of equity capital. We propose a new specification for the empirical test based on the idea that in the previous models one crucial variable was missing: accounting policy choice. We test our theoretical hypothesis using a sample of Spanish firms quoted on the Spanish continuous market from 1999 to 2002. We adopt the ex-ante approach to measure the cost of equity capital, taking analysts predictions as a proxy for expected earnings. As an explanatory variable we use an index measuring annual report disclosure quality. This measure of disclosure is combined with a proxy for the accounting policy choice of the firm. We measure firms' conservatism using the modified Jones model of Dechow et al. (1995) to estimate discretionary accruals. Our results confirm that the relationship between disclosure and cost of capital is affected by the choice of accounting policy.
dc.description.statusPublicado
dc.format.mimetypeapplication/pdf
dc.format.mimetypetext/plain
dc.identifier.bibliographicCitationJournal of Business Finance & Accounting, noviembre/diciembre 2007, Volume 34, Issue 9, p. 1371-1392
dc.identifier.doi10.1111/j.1468-5957.2007.02064.x
dc.identifier.issn0306-686X (print)
dc.identifier.issn1468-5957 (online)
dc.identifier.urihttps://hdl.handle.net/10016/7377
dc.language.isoeng
dc.publisherWiley-Blackwell
dc.relation.publisherversionhttp://www3.interscience.wiley.com/cgi-bin/fulltext/120707253/PDFSTART
dc.relation.publisherversionhttp://dx.doi.org/10.1111/j.1468-5957.2007.02064.x
dc.rights©Wiley-Blackwell
dc.rights.accessRightsopen access
dc.subject.ecienciaEmpresa
dc.subject.otherDisclosure quality
dc.subject.otherCost of capital
dc.subject.otherAccounting policy choice
dc.titleDisclosure interactions and the cost of equity capital: evidence from the spanish continuous market
dc.typeresearch article*
dc.type.reviewPeerReviewed
dspace.entity.typePublication
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