North Korea's threats and the cost of equity capital: The effect of information environments

Yong Mi Kim and Sang Hyuk Lee

Finance Research Letters, 2024, vol. 69, issue PA

Abstract: We examine how the information environment affects the association between North Korea's threats and the cost of equity financing. Using a sample of Korean publicly-listed firms from 2012 to 2019, we find evidence that the adverse effect of North Korea's threats on the cost of equity capital is more significant for companies in less transparent information environments after controlling for other factors. Our findings contribute to the literature by identifying that the information environment affects geopolitical risk.

Keywords: Cost of equity; North Korea's threat; Geopolitical risk; Information environment (search for similar items in EconPapers)
JEL-codes: F50 G10 M40 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324011681

DOI: 10.1016/j.frl.2024.106139

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