Strategic information disclosure and the cost of equity capital: Evidence from China

Mo Yang, Yan Li and Dayong Dong

Finance Research Letters, 2023, vol. 51, issue C

Abstract: Based on SWOT theory with respect to firm's strength, weakness, opportunity, and threat, we construct a corporate strategic dictionary to quantify strategic information disclosure (SID). We then explore the association between SID and the cost of equity capital. Our evidence in China shows that SID is negatively associated with the cost of equity capital. Further, analysts’ forecasts and stock liquidity have a mediating effect on strategic disclosure toward the cost of equity capital, respectively. Our findings support the channel of reducing information asymmetry for the impact of SID on the cost of equity capital.

Keywords: Strategic information disclosure; Cost of equity capital; Analyst forecast; Stock liquidity (search for similar items in EconPapers)
JEL-codes: G12 G30 M40 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:51:y:2023:i:c:s1544612322005955

DOI: 10.1016/j.frl.2022.103418

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