Strategic transparency and informed trading: Will capital market integration force convergence of corporate governance?

Perotti, Enrico C. ; Thadden, Ernst-Ludwig von

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Document Type: Working paper
Year of publication: 2001
The title of a journal, publication series: Cahiers de Recherches Économiques
Volume: 98-04
Place of publication: Lausanne
Publishing house: Département d'Econométrie et d'Economie Politique, Université de Lausanne ; HEC
Edition: Rev. version 2002
Publication language: English
Institution: School of Law and Economics > VWL, Mikroökonomische Theorie (von Thadden)
Subject: 330 Economics
Abstract: Dominant investors can influence the publicly available information about firms by affecting the cost of information collection. Under strategic competition, transparency results in higher variability of profits and output. Thus lenders prefer less transparency, since this protects firms when in a weak competitive position, while equityholders prefer more. Market interaction creates strategic complementarity in gathering information on competing firms, thus entry by transparent competitors will affect price informativeness. Moreover, as the return to information gathering increases with liquidity, increasing global trading may undermine the ability of bank control to keep firms opaque.

Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.

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