Adopting the IFRS and its impact on reducing information asymmetry in the Chilean capital market

Ricardo Campos-Espinoza (), Hanns de la Fuente-Mella (), Berta Silva-Palavecinos () and David Cademartori-Rosso ()

Netnomics, 2015, vol. 16, issue 3, 193-204

Abstract: The purpose of this paper is to measure the effects of adopting International Financial Reporting Standards (IFRS) on market transparency and in information asymmetry reduction. The spread (bid-ask) on intra-day shares from the Santiago Stock Exchange for 2007-2012 is used as a proxy for information asymmetry. The paper analyzes the relation between the spread and the quality of information provided to the capital markets, which are measured by two information disclosure indices (DIS and Botosan), and the relation between the spread and IFRS adoption, also using a group of control variables. We conclude that the disclosure of financial information, which is considered to be a significant element of the quality of corporate governance, and the adoption of IFRS have a negative relation with the spread. This paper contributes to the literature by analyzing this phenomenon in a market characterized by a high concentration of ownership in a country whose legislation protects minority shareholder rights and by using intra-day data to capture spread behavior. Copyright Springer Science+Business Media New York 2015

Keywords: Information asymmetry; Spread (bid-ask); Information disclosure; Econometric modeling (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1007/s11066-015-9101-z (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:netnom:v:16:y:2015:i:3:p:193-204

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11066/PS2

DOI: 10.1007/s11066-015-9101-z

Access Statistics for this article

Netnomics is currently edited by Stefan Voß

More articles in Netnomics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().