- 學位論文
Information Transparency and Cost of Capital: Effects of Firm Life Cycle
Information Transparency and Cost of Capital: Effects of Firm Life Cycle
並列摘要
This study aims to examine the effects of firm life cycle over the relationship between information transparency and cost of capital. Based on agency theory, I posit that the severity of agency problems from free cash flows differs for firms at different life-cycle stages. The marginal benefit that increased information transparency brings to the firms’ cost of capital is expected to be greatest for mature firms and smallest for decline firms. Using archival data from publicly listed companies in Taiwan, I find that the relationship between information transparency and cost of capital differs for firms at different life-cycle stages. More specifically, the association between corporate information transparency and cost of capital is stronger for mature firms and, in contrast, weaker for decline firms. When cost of capital is measured by credit ratings, an ex ante measure of cost of debt, the association between corporate information transparency and credit ratings is stronger for mature firms. When cost of capital is proxied by cost of equity, the association between information transparency and cost of equity is weaker for decline firms.