When Does Information Asymmetry Affect the Cost of Capital

By Christopher S. Armstrong, John E. Core, Daniel J. Taylor, Robert E. Verrecchia. 2011

442 citations recorded by the source corpus.

View Paper: https://www.semanticscholar.org/paper/4c19e3382d98243b57af33b3e8d48956ea38048e

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Citations in the corpus

Do Independent Directors Cause Improvements in Firm Transparency (2014, methodology): “We measure IAC_spread following Madhavan, Richardson, and Roomans (1997), as modified by Armstrong et al. (2011). The procedure yields an estimated adverse selection component as a percentage of price, which we label IAC_spread.”
Corporate Life Cycle and Cost of Equity Capital (2015, unknown): “This information asymmetry may cause equity mispricing (Myers and Majluf, 1984), which is positively related to riskiness and the cost of capital (Armstrong et al., 2011).”
The Relation Between Reporting Quality and Financing and Investment: Evidence from Changes in Financing Capacity: REPORTING QUALITY AND FINANCING AND INVESTMENT (2014, unknown): “We estimate IAC_spread following Madhavan, Richardson, and Roomans [1997] (as described in Armstrong et al. [2011]). The resulting estimate expresses the information asymmetry component of the bid-ask spread as a percentage of price (“IAC_spread”). Because running the algorithm is very time-consumin”
Does Information Asymmetry Affect Corporate Tax Aggressiveness? (2017, background): “, Easley and O’Hara, 2004; Armstrong et al., 2011), it becomes more difficult for the firms to access external financing after experiencing exogenous drops in the number of analysts following the firm. Edwards et al. (2013) find that firms avoid more tax when firms have higher degree of macro-level ”
The Media and Mispricing: The Role of the Business Press in the Pricing of Accounting Information (2014, unknown): “than the trades of unsophisticated investors (Armstrong et al. 2011).”
Financial Reporting Frequency, Information Asymmetry, and the Cost of Equity (2012, unknown): “6 Armstrong et al. (2011) show that the impact of information asymmetry on the cost of equity depends on the competitiveness of the market.”
The effect of corporate tax avoidance on the cost of equity (2013, methodology): “We select FIRM_CONTROLS that are documented in prior literature to be associated with the cost of equity capital (e.g., Fama and French 1992, 1993; Botosan and Plumlee 2005; Armstrong et al. 2011).”
Voluntary Disclosure and Information Asymmetry: Evidence from the 2005 Securities Offering Reform: VOLUNTARY DISCLOSURE AND INFORMATION ASYMMETRY (2013, unknown): “We measure ASC_Spread using the procedure described in the appendix of Armstrong et al. [2011]. Our second proxy for information asymmetry is the average daily depth (Market Depth), or order size, because liquidity suppliers can address adverse selection concerns by adjusting spread and/or the numbe”
Financial statement comparability and credit risk (2013, unknown): “Armstrong et al. (2011) use number of investors in a firm as a proxy for the degree of competition in the firm’s equity, and find that information asymmetry is priced only when the degree is of competition is low.”
Does Earnings Quality Affect Information Asymmetry? Evidence from Trading Costs*: Earnings Quality and Information Asymmetry (2013, unknown): “22 Two recent studies, Akins et al. (2011) and Armstrong et al. (2011) examine the impact of investor competition on pricing of information asymmetry.”
Corporate governance and the information environment: Evidence from state antitakeover laws ☆ (2012, background): “4 See Bushman and Smith (2001, 2003) and Armstrong et al. (2010) for detailed surveys of this literature.”