Does Financial Information Transparency and Objectivity Matter for Stock Market Development? A Panel Regression Analysis for The Selected European Countries

Lazarov, Darko and Lakovic, Tanja and Miteva-Kacarski, Emilija (2017) Does Financial Information Transparency and Objectivity Matter for Stock Market Development? A Panel Regression Analysis for The Selected European Countries. Research Papers of the Wroclaw University of Economics / Prace Naukowe Uniwersytetu Ekonomicznego we Wroclawiu (482). pp. 121-129. ISSN 1899-3192

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Abstract

The paper investigates whether financial transparency and objectivity matter for stock market development. We test this hypothesis by using a sample of 38 selected European economies for the period 2006-2014 by applying dynamic panel regression analysis (Generalized Method of Moments). The strength of auditing and reporting standards (SARS) is used as the approximated variable for measuring the financial transparency and objectivity, while the stock market capitalization relative to GDP is a commonly used variable for stock market development. The estimated results indicate that financial information quality has a positive and significant impact on stock market development after controlling for the standard macroeconomic and financial specific stock market determinants, suggesting that financial reporting quality is one of the most important determinants of stock market development. The effects of financial reporting and auditing standards to stock market development are much more significant in the case of the non-EU countries(original abstract)

Item Type: Article
Subjects: Social Sciences > Economics and business
Divisions: Faculty of Economics
Depositing User: Darko Lazarov
Date Deposited: 12 Mar 2018 07:33
Last Modified: 12 Mar 2018 07:33
URI: http://eprints.ugd.edu.mk/id/eprint/19721

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