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  4. The effect of accounting disclosure on cost of equity capital in emerging capital markets: the Egyptian case
 
Zitierlink DOI
10.26092/elib/618

The effect of accounting disclosure on cost of equity capital in emerging capital markets: the Egyptian case

Veröffentlichungsdatum
2021-04-07
Autoren
Yassen, Sameh  
Betreuer
Zimmermann, Jochen  
Gutachter
Abdou, Hussein  
Zusammenfassung
The study analysed the relationship between accounting disclosure, both mandatory and voluntary, on the cost of equity capital for listed companies in the Egyptian exchange. The focus is on analysing this relationship in one of the emerging capital markets where there is a paucity of research analysing this issue. To achieve this aim, two self-constructed disclosure indices for mandatory and voluntary disclosure were used to measure the level of disclosure in Egypt. The cost of equity capital was measured based on three methods identified in the literature, namely the capital asset pricing model (CAPM), the Fama-French three factor model, and the industrial earnings-price ratio. To analyse the effect of accounting disclosure on the cost of equity capital, each of the cost of equity measurement methods was regressed on mandatory and voluntary disclosure scores, alternatively, and some controls that are identified in the literature to affect the association between the two variables. The control variables used were firm size, leverage, book-to-market ratio, profitability, liquidity, and sales growth. As a robustness check, a composite measure of the three cost of equity methods was used and the effect of the control variables was excluded from the analyses. To control for the existent endogeneity in the explanatory variable, accounting disclosure, a dynamic panel system of the generalized method of moments (SGMM) was used in the regression analyses. Using a sample of 657 firm year observations for 73 firms across 11 industries for nine years from 2008 to 2016, the study found a significant negative association between voluntary disclosure level and cost of equity capital, however, the study found a significant positive association between mandatory disclosure level and cost of equity capital. The results of the study could benefit various parties including researchers, regulators, and investors. It provides a motivation to researchers interested in analysing this association in Egypt and other emerging markets besides providing these researchers with a suitable data set to measure disclosure and cost of equity capital in Egypt. Regulators could benefit from the results of the study through identifying the shortcomings that need to be overcome to improve the disclosure environment in Egypt. Investors could use the results of the study as a data source in making investment decisions in Egypt.
Schlagwörter
Disclosure

; 

Cost of Equity Capital

; 

Egypt
Institution
Universität Bremen  
Fachbereich
Fachbereich 07: Wirtschaftswissenschaft (FB 07)  
Dokumenttyp
Dissertation
Zweitveröffentlichung
Nein
Sprache
Englisch
Dateien
Lade...
Vorschaubild
Name

Sameh Yassen.pdf

Size

3.2 MB

Format

Adobe PDF

Checksum

(MD5):e3fd715cc35cbb21a36449255269e3e2

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