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Financial integration, investor protection and imbalanced optimistically biased information timeliness in emerging markets

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posted on 2023-06-09, 17:30 authored by Xiaoxiang ZhangXiaoxiang Zhang, Qiyu Zhang, Ding Chen, Gu Jun
Principal-principal conflicts in many emerging markets can lead to an optimistically biased information environment. Using 24 emerging markets during the period 1996–2016, this paper examines how market-level, firm-level financial integration and investor protection quality jointly affect Imbalanced Optimistically Biased Information Timeliness (IOBIT). Results show that financial integration and investor protection quality affect good and bad information timeliness asymmetrically. Market-level financial integration augments IOBIT while firm-level financial integration and investor protection mitigate IOBIT. The effect of firm-level financial integration in mitigating IOBIT is reduced when market-level financial integration increases and/or investor protection becomes stronger. Our analysis enhances our understanding of the benefit-cost trade-off associated with financial integration in affecting information timeliness and the conditional factors in altering this benefit-cost trade-off in emerging markets.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

International Review of Financial Analysis

ISSN

1057-5219

Publisher

Elsevier

Volume

64

Page range

38-56

Department affiliated with

  • Accounting and Finance Publications

Research groups affiliated with

  • Business and Finance Research Group Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2019-04-05

First Open Access (FOA) Date

2020-10-18

First Compliant Deposit (FCD) Date

2019-04-04

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