What you say and how you say it : Information disclosure in Latin American firms

Firms in Latin America could differentiate themselves by adopting better information disclosure practices. In this paper, we construct an Information Disclosure Index (IDI) for a sample of 454 firms in the six largest Latin America countries. We look at 4.622 company reports and show that firms with...

Full description

Autores:
González Ferrero, Maximiliano
Guzmán Vásquez, Alexander
Téllez Falla, Diego Fernando
Trujillo Dávila , María Andrea
Tipo de recurso:
Article of investigation
Fecha de publicación:
2021
Institución:
Colegio de Estudios Superiores de Administración
Repositorio:
Repositorio CESA
Idioma:
eng
OAI Identifier:
oai:repository.cesa.edu.co:10726/5062
Acceso en línea:
http://hdl.handle.net/10726/5062
https://doi.org/10.1016/j.jbusres.2019.05.014
Palabra clave:
Disclosure
Content analysis
Corporate governance
Firm value
Rights
License
Acceso Restringido
Description
Summary:Firms in Latin America could differentiate themselves by adopting better information disclosure practices. In this paper, we construct an Information Disclosure Index (IDI) for a sample of 454 firms in the six largest Latin America countries. We look at 4.622 company reports and show that firms with better disclosure practices have better market valuation (Tobin's Q) and better accounting financial performance (return on equity, ROE). We then measure the tone of the information disclosed using word content analysis and find that uncertainty in tone is negatively associated with firm valuation and accounting financial performance while a positive tone in corporate communications is positively associated with firm value and performance. This paper shows that the tone in corporate communications is as relevant as the amount of information disclosed to the market.