Beekes, Wendy and Brown, Philip and Zhan, Wenwen and Zhang, Qiyu (2012) The relationship between disclosure, information timeliness and corporate governance: A cross country study. Working Paper. Lancaster University, Lancaster. (Unpublished)
We examine the link between corporate governance, and the level of firms’ disclosures and timeliness of price discovery in a cross-country study of the period 2003 to 2008. Our results confirm better-governed firms make more announcements to the market. We also find different levels of disclosure between common and civil law countries, with firms with better governance in common law countries being associated with greater disclosure. Our timeliness of prices results suggest better governance is associated with less timely reflection of a firm’s performance information in share prices. This would suggest corporate governance is a substitute rather than a complement with respect to corporate transparency. These results lead us to the conclusion that even if more information is disclosed by better-governed firms, it is not necessarily the case that it will be reflected in share prices in a more timely fashion.
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