Beekes, Wendy and Brown, Philip and Zhang, Qiyu (2012) Corporate governance and the informativeness of disclosures in Australia: A re-examination. Working Paper. Lancaster University, Lancaster. (Unpublished)
Abstract
We re-examine the association between corporate governance and corporate disclosures. Our sample comprises companies listed on the Australian Securities Exchange (ASX) that were rated in the annual Horwath/WHK Horwath Corporate Governance Reports. Panel data and firm fixed effects approaches are used to capitalise on the extended time series of governance data, and endogeneity is addressed through instrumental variables and models specified in first differences. We show better-governed Australian firms do indeed make more timely disclosures, but in a more subtle way than previously thought. Furthermore, we confirm that firms with higher governance ratings are priced more efficiently in the share market. Finally, we note it is still possible for firms to use governance structures to distinguish themselves despite a convergence in governance practices since the ASX’s regulatory intervention in 2003.
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