Measuring Public Announcements’ Disclosure Quality on Tallinn, Riga and Vilnius Stock Exchanges

Laivi Laidroo ()
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Laivi Laidroo: Department of Economics at Tallinn University of Technology

No 181, Working Papers from School of Economics and Business Administration, Tallinn University of Technology

Abstract: Previous literature has been occupied with measuring disclosure quality in financial reports and no indication has been provided on how the quality of public announcements could be measured. The purpose of this paper is to introduce a methodological approach to its measurement and to illustrate its implementation possibilities in the context of Tallinn, Riga and Vilnius Stock Exchanges. The disclosure quality measure proposed was based on six quality attributes (informativeness, relevance, precision, rarity, frequency, and unexpectedness) defined in the context of information theory and operationalised through finance/accounting and cognitive psychology theories. Implementation in the context of three capital markets confirmed that there has been an increase in disclosure quality over time. Company size and stock exchange where the company was listed affected its disclosure quality level. Main areas for disclosure quality improvement were identified and the results also indicated that small firms and companies with low quality disclosures tended to be less prone to disclosure quality improvement.

Keywords: Disclosure; public announcements; emerging markets (search for similar items in EconPapers)
JEL-codes: G1 G3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc and nep-cfn
Date: 2008
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Published in Working Papers in Economics.School of Economics and Business Administration,Tallinn University of Technology (TUTWPE), Pages 5-27

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