Beekes, Wendy and Brown, Philip and Chin, Germaine and Zhang, Qiyu (2012) The effects of corporate governance on information disclosure, timeliness and market participants’ expectations. Working Paper. Lancaster University, Lancaster.
Using a sample of Canadian firms for the period 2002-2007, we examine whether Corporate Governance (CG) has a significant influence on the frequency of firms’ disclosures, the timeliness of price discovery or on market participants’ (analysts’) behavior in Canada. Our models use both aggregate and underlying measures of CG to help identify which particular aspects of CG are more influential. Our results suggest only certain components of CG are associated with the number of releases to the stock market and the timeliness of information discovery in firm’s stock price. With regard to analysts’ earnings forecasts evidence suggests better CG results in more informative disclosures; the aggregate CG measure is associated with greater forecast accuracy, lower dispersion in forecasts and greater analyst following. Our results confirm CG can play a significant role in determining the efficiency of a country’s equity market.
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