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The Effect Of Earnings Quality And Country-Level Institutions On The Value Relevance Of Earnings, Steven F. Cahan, David Emanuel, Jerry Sun
The Effect Of Earnings Quality And Country-Level Institutions On The Value Relevance Of Earnings, Steven F. Cahan, David Emanuel, Jerry Sun
Odette School of Business Publications
This study investigates the relationship between the value relevance of earnings and earnings quality across countries. We find that there is a stronger relationship between earnings quality and the value relevance of earnings in countries with high investor protection than in countries with weak investor protection. We also find that the association between the value relevance of earnings and earnings quality is higher when a country's information environment is less opaque. Overall, our study documents evidence on international differences in the ability of stock prices to capture useful accounting information, consistent with the notion that the returns-earnings association reflects not …
The Effect Of Globalization And Legal Environment On Voluntary Disclosure, Kimberley A. Webb, Steven Cahan, Jerry Sun
The Effect Of Globalization And Legal Environment On Voluntary Disclosure, Kimberley A. Webb, Steven Cahan, Jerry Sun
Odette School of Business Publications
We examine how interactions with foreign capital, product, and labor markets affect the disclosure practices of non-U.S. multinational firms. Drawing on literature related to multinationals, country-level legal institutions, and accounting disclosures, we expect that the relation between globalization and voluntary disclosure will be conditioned by the legal environment in a firm's home country. Specifically, while firms from countries with a strong legal environment (e.g., common-law countries) already face pressure for good disclosure, globalization can increase the benefits associated with good disclosure to firms from weak legal environments (e.g., civil-law countries). We use a self-constructed voluntary disclosure index and hand-collected disclosure …