Inequality of information and the value of firms

Arif Budi Satrio, Mustaruddin Saleh and Wendy

International Journal of Banking, Accounting and Finance, 2022, vol. 13, issue 2, 241-260

Abstract: Using a panel dataset of 425 non-financial firms listed on the Indonesia Stock Exchange from 2005 to 2019, we tested whether information inequality could systematically affect a firm's value. The research results show that a severe information gap will lead to errors by investors in assessing a firm. The results of this test are still robust after using different proxies, controlling for several potential factors, and eliminating endogeneity effects. This study provides insight into the phenomenon of information inequality in capital markets in developing countries and provides practical implications.

Keywords: information inequality; asymmetric information; bid-ask spread; firm value; emerging market; Indonesia. (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ids:injbaf:v:13:y:2022:i:2:p:241-260

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