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An International Meeting of American Accounting
Association
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Financial Reporting Quality, Disclosure, and Emerging Market Companies' Access to Capital in Global Equity Markets |
Carol Ann Frost
State University of New York at Buffalo
Elizabeth A. Gordon
Rutgers University
Grace Pownall
Emory University
Abstract: This study examines how financial reporting and disclosure quality relates to access to capital in global equity markets by emerging market companies. We estimate regression models using a sample of 342 companies from 17 emerging Latin American and Asian countries. As a proxy for capital market access, we use a measure of global equity offering and listing activity. Our proxies for financial reporting and disclosure quality are: (1) extent to which accounting principles used are internationally accepted; (2) internet information dissemination; (3) Standard & Poor’s Transparency and Disclosure Index; (4) global versus non-global auditor; and (5) whether financial reports are readily available in English. We find strong positive associations between financial reporting and disclosure quality and access to capital, even after controlling for many potentially relevant explanatory variables.