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The Relationship between Voluntary Disclosure, External Financing, and Financial Status

Author

  • Håkan Jankensgård

Summary, in English

Using unique Swedish disclosure data from 2007 to 2012, this paper reports three important sets of findings with regard to the relationship between firms’ voluntary disclosure, external financing, and financial status. First, financially strong firms disclose more than weaker ones. Second, firms that obtain new financing (equity or debt) disclose more than firms that do not. Third, the association between voluntary disclosure and financing events is stronger in financially weak firms. This last finding is new in the literature. Perhaps financially weak firms that obtain external funding have higher disclosure to counteract contracting and valuation problems in the financial markets.

Publishing year

2015

Language

English

Publication/Series

Journal of Business Finance & Accounting

Volume

Forthcoming

Document type

Working paper

Topic

  • Business Administration

Keywords

  • Voluntary disclosure
  • financial status
  • external finance
  • debt overhang

Status

Published