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Keywords:

  • Continental Europe;
  • cost of debt capital;
  • implied cost of equity capital;
  • endogeneity;
  • cost of finance;
  • information asymmetry;
  • Internet reporting;
  • non-financial disclosure;
  • North America;
  • Web disclosure

Abstract:  We study the association of Web-based non-financial disclosure and a firm's cost of finance within an international context (North America and Continental Europe). We examine voluntary Web placement of non-financial disclosures using an information index covering a firm's value creation process. We find a negative association between the level of Web-based non-financial disclosure and the implied cost of equity capital in North America and in Continental Europe. Continental European firms with higher levels of Web-based non-financial disclosure also tend to benefit from a lower information asymmetry and from a lower cost of debt capital, whereas North American firms do not.