An International Meeting of the American Accounting Association American Accounting Association 2006 Annual Meeting August 6–9, 2006 Washington, D.C.

Asheq Razaur Rahman
Massey University

Roger S. Debreceny
University of Hawai’I

Abstract: We examine the combined influences of availability of corporate announcements on stock exchange websites and the capability of investors to access such information through the Internet on the cost of equity in a country. The combined influence provides a measure of online accessibility of the investors to material information about corporate performance. We conduct a two-stage analysis. In the first stage, using a sample of 165 countries, we corroborate the evidence of finance literature that capital market infrastructure is indeed important for the economic efficiency of capital markets. In the second stage, using a sample of 52 stock exchanges that were members of the World Federation of Stock Exchanges (WFE) and the Internet usage rate of the countries in which these stock exchanges are located, we demonstrate that markets that have better online accessibility to corporate announcements have lower costs of equity.

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