Information Asymmetry, Diversification, and Cost of Capital

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The effects of financial reporting and disclosure on corporate investment: A review (2019, background): “Some channels debated in the literature include a reduction in estimation risk (Easley and O’Hara, 2004; Lambert et al., 2007, 2012; Hughes et al., 2007) and improved risk sharing (Merton, 1987; Diamond and Verrecchia, 1991).”
Cost of Capital and Earnings Transparency (2008, unknown): “Thus, it is possible that the factor returns reflect risk arising from information asymmetry (Hughes et al., 2007; Lambert et al., 2007).”
Political connections and the cost of equity capital (2012, unknown): “Thus, our investigation reflects arguments that the costs of external finance are driven by the extent of firms’ agency and information problems (e.g., Easley and O’Hara, 2004; Hughes et al., 2007), and our use of the cost of equity as a test vehicle allows us to uncover the extent of such problems ”
Mandatory IFRS Adoption and Institutional Investment Decisions (2012, unknown): “Theory suggests that these outcomes will follow if (1) market liquidity increases and price protection falls due to lower information asymmetries among investors (Baiman and Verrecchia 1996; Verrecchia 2001); (2) risk sharing improves due to increased awareness of investment opportunities by investo”