Information asymmetry, disclosure and foreign institutional investment: an empirical investigation of the impact of the Sarbanes-Oxley Act

Do foreign institutional investors (FII) regard the introduction of rigorous disclosure requirements as a major incentive to invest in U.S. equities? We investigate the role of information asymmetry and the impact of firm-level disclosure on FII decisions. We use a unique context for analysis -- the enactment of the Sarbanes-Oxley Act (SOX), and find that foreign institutional investors increase their equity holdings in U.S. listed firms following the passage of SOX. The increase in U.S. equity holdings is largely accounted by passive, non-monitoring FII, who have the most to gain from the SOX-led reduction in the value of private information

BRAZIL: RAPID DEVELOPMENT, INTERNATIONALIZATION, AND MIDDLE CLASS FORMATION

Some three decades ago, the business world was focused strictly on such post-industrial economies as the U.S., Germany, UK, and Japan. It was thought that there was no place beyond the western markets. Fast forward to today, the marketplace has been transformed radically. The forces of globalization brought about a highly competitive and crowded landscape, featuring numerous new players from the so-called Emerging Markets (better referred to as ‘growth markets’ since the most common element of these rapidly transforming economies is sustained growth). The center of economic gravity has now shifted to east Asia. Yesterday’s poor and developing countries have profited from the globalized information and communication technologies. These countries have been experiencing rapid pace of economic development, market liberalization, industrialization, modernization, and urbanization

International business : the new realities (BI)

619 hlm.: 28 c