An Empirical Study on the Relationship between Performance and Information Transparency and between Cost of Debt and Information Transparency in the International Financial Institutions.
Date Issued
2006
Date
2006
Author(s)
CHEN, CHAO-YU
DOI
zh-TW
Abstract
Information which corporations disclose would help owners assess the corporations’ operation. The more information disclose, the more possibility the managers would be supervised. So managers would make the best benefit for company to maintain their position and reputation. According to signaling theory, good financial institutions would actively disclose information to eliminate investors’ and debtors’ doubt, and borrow the cheaper debt.
This research uses international financial institutions as research examples to investigate the relationship between performance and information transparency, and the relationship between cost of debt and information transparency. This research adopts Standard & Poor's information transparency measurement criteria for Russian bank in 2005, including three dimensions (1) Ownership Structure and Shareholder Right. (2) Financial and Operation Information. (3) Board and Management Structure and Process.
The empirical results suggest that the entire information transparency, and information about "Ownership Structure and Shareholder Right", "Financial and Operation Information", or "Board and Management Structure and Process" are positively related with performance. The result is the same as this research’s expectation.
The empirical results suggest that the entire information transparency, and information about "Ownership Structure and Shareholder Right", "Financial and Operation Information", or "Board and Management Structure and Process" are negatively related with cost of debt. The result is the same as this research expects. But the relationship between "Ownership Structure and Shareholder Right" and cost of debt is not obviously with others. The reason could be the information about "Ownership Structure and Shareholder Right" primarily protect shareholders’ right, not debtors’ right, so debtors don’t decrease interest rate for corporations’ disclosure.
Subjects
公司治理
資金成本
corporate governance
information transparency.
Cost of capital
information disclosure
Type
other
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