Les Cahiers de Recherche - HEC Paris
The economic consequences of increasing the international visibility of financial reports
(), Thomas Jeanjean and Michael Erkens
Abstract: Author's abstract. We investigate the economic
consequences of increasing financial report visibility, measured by the use
of english as a reporting language for firms from non-English-speaking
countries. We sample 113 firms that started publishing their annual report
in English (in addition to their local language) during 2004-2007 while not
cross listing, not joining a major stock index or a stock index that
requires external reporting in English and not engaging in major M&A
activity. Taking into account the endogeneity of the reporting language,
with a difference-in-differences setting and propensity score matching, and
controlling for confounding factors, we find that adoption of English in
the annual report is associated with lower information asymmetry, greater
analyst following and more foreign investors.
This suggests that
language per se is an attribute of the firm’s visibility.
Keywords: annual report; economic consequences; translation; english; information asymmetry; analyst following; foreign ownership; (follow links to similar papers)
JEL-Codes: G14; (follow links to similar papers)
52 pages, November 8, 2011
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