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Foreign competition for shares and the pricing of information asymmetry: Evidence from equity market liberalization

Publication ,  Journal Article
Balakrishnan, K; Vashishtha, R; Verrecchia, RE
Published in: Journal of Accounting and Economics
February 1, 2019

Using the equity market liberalization of 23 emerging market countries between 1996 and 2006, we examine how the degree of competition for a firm's shares affects the price of information asymmetry. We find evidence of a significant decline in the pricing of information asymmetry as countries remove regulatory restrictions on foreign ownership. Our study provides novel evidence on the link between the degree of competitiveness of equity markets and the price of information asymmetry. The work also furthers our understanding of the economic consequences of foreign stock ownership.

Duke Scholars

Published In

Journal of Accounting and Economics

DOI

ISSN

0165-4101

Publication Date

February 1, 2019

Volume

67

Issue

1

Start / End Page

80 / 97

Related Subject Headings

  • Accounting
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 3501 Accounting, auditing and accountability
  • 1502 Banking, Finance and Investment
  • 1501 Accounting, Auditing and Accountability
  • 1402 Applied Economics
 

Citation

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Balakrishnan, K., Vashishtha, R., & Verrecchia, R. E. (2019). Foreign competition for shares and the pricing of information asymmetry: Evidence from equity market liberalization. Journal of Accounting and Economics, 67(1), 80–97. https://doi.org/10.1016/j.jacceco.2018.08.015
Balakrishnan, K., R. Vashishtha, and R. E. Verrecchia. “Foreign competition for shares and the pricing of information asymmetry: Evidence from equity market liberalization.” Journal of Accounting and Economics 67, no. 1 (February 1, 2019): 80–97. https://doi.org/10.1016/j.jacceco.2018.08.015.
Balakrishnan K, Vashishtha R, Verrecchia RE. Foreign competition for shares and the pricing of information asymmetry: Evidence from equity market liberalization. Journal of Accounting and Economics. 2019 Feb 1;67(1):80–97.
Balakrishnan, K., et al. “Foreign competition for shares and the pricing of information asymmetry: Evidence from equity market liberalization.” Journal of Accounting and Economics, vol. 67, no. 1, Feb. 2019, pp. 80–97. Scopus, doi:10.1016/j.jacceco.2018.08.015.
Balakrishnan K, Vashishtha R, Verrecchia RE. Foreign competition for shares and the pricing of information asymmetry: Evidence from equity market liberalization. Journal of Accounting and Economics. 2019 Feb 1;67(1):80–97.
Journal cover image

Published In

Journal of Accounting and Economics

DOI

ISSN

0165-4101

Publication Date

February 1, 2019

Volume

67

Issue

1

Start / End Page

80 / 97

Related Subject Headings

  • Accounting
  • 3801 Applied economics
  • 3502 Banking, finance and investment
  • 3501 Accounting, auditing and accountability
  • 1502 Banking, Finance and Investment
  • 1501 Accounting, Auditing and Accountability
  • 1402 Applied Economics