Journal of Accounting and Economics Vol. 54 No. 2-3 2012
Financial reporting opacity and informed trading by international institutional investors
Abstract
Using cross-country data on trading by international mutual funds, I find that firms with more opaque information environments, as captured by firm- and country-level measures of the availability of financial reporting information, experience more privately informed trading by institutional investors. The association between firm-level opacity and informed trading is most pronounced where country-level disclosure infrastructures are less developed and for those investors for whom the incentives and opportunities to acquire private information are greatest. A difference-in-differences analysis of the returns earned by institutions in opaque stocks suggests that this information advantage is economically significant.
- DOI
- 10.1016/j.jacceco.2012.09.002
- Volume
- 54
- Issue
- 2-3
- Pages
- 201-220
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref