What you say and how you say it: Information disclosure in Latin American firms

Maximiliano González (), Alexander Guzmán, Diego Fernando Tellez and María Andrea Trujillo

No 15656, Documentos de Trabajo de Valor Público from Universidad EAFIT

Abstract: Firms in Latin America could differentiate themselves by adopting better information disclosure practices. In this paper, we construct an Information Disclosure Index (IDI) for a sample of 454 firms in the six largest Latin America countries. We look at 3.191 company reports and show that firms with better disclosure practices have better market valuation (Tobin’s Q) and operating performance (ROE). We then measure the tone of the information disclosed using word content analysis, and find that uncertainty in tone is negatively associated with higher firm valuation (Tobin’s Q) and better financial performance (ROE).

Keywords: Disclosure; Content analysis; Corporate governance; Firm value (search for similar items in EconPapers)
JEL-codes: G15 G34 (search for similar items in EconPapers)
Pages: 28
Date: 2016-10-01
New Economics Papers: this item is included in nep-bec and nep-cfn
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Persistent link: https://EconPapers.repec.org/RePEc:col:000122:015656

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