Abstract
Employing a comprehensive measure of country-level corporate transparency, we document a positive relation between corporate transparency and externally financed firm growth. This relation is robust to controlling for variables related to the quality of a country’s legal institutions and the overall level of financial development. We also show that the level of external financing in the form of long-term debt is higher among firms in countries with greater corporate transparency. Further cross-sectional tests reveal that the role of corporate transparency in firm growth and external financing is less pronounced among bank-oriented countries as compared to market-oriented countries. In sum, our evidence highlights the positive impact of corporate transparency on economic growth through its impact on firm access to low-cost external financing.
Original language | English (US) |
---|---|
Pages (from-to) | 57-81 |
Number of pages | 25 |
Journal | Journal of International Accounting Research |
Volume | 21 |
Issue number | 2 |
DOIs | |
State | Published - Jun 1 2022 |
Externally published | Yes |
Keywords
- corporate transparency
- external financing
- firm growth
ASJC Scopus subject areas
- Business and International Management
- Accounting