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Web-Based Non-Financial Disclosure and Cost of Finance

Authors

  • Raf Orens,

    1. The first author is from the Department of Business Studies, Lessius (K.U. Leuven), Belgium. The second author is from the Department of Accounting and Finance, University of Antwerpen, Belgium. The third author is from the Département des sciences comptables, Université du Québec à Montréal (UQAM), Canada. They are very grateful for the comments and suggestions from the editor, the anonymous referee and the workshop participants at the University of Antwerpen and the Catholic University of Leuven.
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  • Walter Aerts,

    1. The first author is from the Department of Business Studies, Lessius (K.U. Leuven), Belgium. The second author is from the Department of Accounting and Finance, University of Antwerpen, Belgium. The third author is from the Département des sciences comptables, Université du Québec à Montréal (UQAM), Canada. They are very grateful for the comments and suggestions from the editor, the anonymous referee and the workshop participants at the University of Antwerpen and the Catholic University of Leuven.
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  • Denis Cormier

    Corresponding author
    1. The first author is from the Department of Business Studies, Lessius (K.U. Leuven), Belgium. The second author is from the Department of Accounting and Finance, University of Antwerpen, Belgium. The third author is from the Département des sciences comptables, Université du Québec à Montréal (UQAM), Canada. They are very grateful for the comments and suggestions from the editor, the anonymous referee and the workshop participants at the University of Antwerpen and the Catholic University of Leuven.
      Address for correspondence: Raf Orens, Department of Business Studies, Lessius (K.U.Leuven), Korte Nieuwstraat 33, 2000 Antwerpen, Belgium.
      e-mail: raf.orens@lessius.eu
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Address for correspondence: Raf Orens, Department of Business Studies, Lessius (K.U.Leuven), Korte Nieuwstraat 33, 2000 Antwerpen, Belgium.
e-mail: raf.orens@lessius.eu

Abstract

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.

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