Date of this Version
Journal of Accounting and Economics
We examine the relation between corporate governance and firms' information environments. We use the passage of state antitakeover laws in the U.S. as a source of exogenous variation in an important governance mechanism to identify changes in firms' information environments. We find that information asymmetry and private information gathering decreased and that financial statement informativeness increased following the passage of the antitakeover laws. Cross-sectional analyses indicate that the increased level of financial statement informativeness is attributable to firms that are most likely to access equity markets rather than managerial entrenchment, managerial career concerns, or managers' pursuit of the quiet life.
© 2012. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
antitakeover laws, corporate governance, financial reporting quality, information asymmetry
Armstrong, C. S., & Balakrishnan, K. (2012). Corporate Governance and the Information Environment: Evidence From State Antitakeover Laws. Journal of Accounting and Economics, 53 (1-2), 185-204. http://dx.doi.org/10.1016/j.jacceco.2011.06.005
Date Posted: 27 November 2017
This document has been peer reviewed.