Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105163
Authors: 
Sieber, Tom
Weißenberger, Barbara E.
Oberdörster, Tatjana
Baetge, Jörg
Year of Publication: 
2014
Citation: 
[Journal:] Business Research [ISSN:] 2198-2627 [Publisher:] Springer [Place:] Heidelberg [Volume:] 7 [Year:] 2014 [Issue:] 2 [Pages:] 263-312
Abstract: 
This paper deals with the impact of voluntary strategy disclosure in management reports on the cost of equity capital. Such an impact is not obvious, as investors might consider strategy information as 'cheap talk' and therefore ignore it. We analyze a sample of 100 German listed firms from 2002 to 2008, measuring strategy disclosure levels using hand-collected strategy disclosure scores. We find that higher disclosure levels are, on average, associated with lower cost of equity capital even after controlling for overall disclosure quality. The paper contributes to the field by providing evidence that voluntary strategy disclosures in firms' management reports reduce the information asymmetry component of cost of capital and therefore can be considered as a relevant source of information for investors.
Subjects: 
Voluntary disclosure
Strategy
Management report
Management commentary
Cost of equity capital
Bid-ask spreads
Trading volume
JEL: 
M10
M21
M41
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/2.0/
Document Type: 
Article

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