Accounting Papers

Document Type

Journal Article

Date of this Version

2012

Publication Source

Journal of Accounting and Economics

Volume

53

Issue

1-2

Start Page

185

Last Page

204

DOI

10.1016/j.jacceco.2011.06.005

Abstract

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.

Copyright/Permission Statement

© 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/

Keywords

antitakeover laws, corporate governance, financial reporting quality, information asymmetry

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Date Posted: 27 November 2017

This document has been peer reviewed.