Foreign Institutional Investors and Corporate Voluntary Disclosure Around the World

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

90 Scopus Citations
View graph of relations

Author(s)

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)319-348
Journal / PublicationThe Accounting Review
Volume94
Issue number5
Online publishedJan 2019
Publication statusPublished - Sept 2019

Abstract

We examine the impact of foreign institutional investors on firms' voluntary disclosure practices measured by management forecasts. In a sample of 32 non-U.S. countries, we find that, on average, foreign institutional investments lead to improved voluntary disclosure, and their impact is larger than that of domestic institutional investors. These results are more pronounced when foreign institutional investors (1) are unfamiliar with the firm's home country, (2) have longer investment horizons, and (3) are from countries with stronger investor protection and disclosure requirements than the firm's home country. However, we also find some evidence of voluntary disclosure deterioration in firms with foreign institutional investors from countries with inferior disclosure requirements and securities regulations and with concentrated foreign institutional ownership. Overall, our results suggest that the relation between foreign institutional investors and voluntary disclosure is much richer and more complex than what has been documented for domestic institutional investors in the literature.

Research Area(s)

  • Foreign institutional investors, Information environment, Management forecasts, Voluntary disclosure

Bibliographic Note

Information for this record is supplemented by the author(s) concerned.

Citation Format(s)

Foreign Institutional Investors and Corporate Voluntary Disclosure Around the World. / Tsang, Albert; Xie, Fei; Xin, Xiangang.
In: The Accounting Review, Vol. 94, No. 5, 09.2019, p. 319-348.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review