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

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Zhang, Xiaoxiang, Zhang, Qiyu, Chen, Ding and Jun, Gu (2019) Financial integration, investor protection and imbalanced optimistically biased information timeliness in emerging markets. International Review of Financial Analysis, 64. pp. 38-56. ISSN 1057-5219

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Abstract

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.

Item Type: Article
Keywords: Financial Integration, Investor Protection, Information Timeliness, Emerging Markets
Schools and Departments: School of Business, Management and Economics > Accounting and Finance
Research Centres and Groups: Business and Finance Research Group
Subjects: H Social Sciences > HG Finance > HG4001 Finance management. Business finance. Corporation finance
Depositing User: Xiaoxiang Zhang
Date Deposited: 05 Apr 2019 11:40
Last Modified: 29 Oct 2019 14:22
URI: http://sro.sussex.ac.uk/id/eprint/83048

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