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Corporate disclosure, compliance and consequences: evidence from Russia

Banerjee, Suman, Estrin, Saul ORCID: 0000-0002-3447-8593 and Pal, Sarmistha (2022) Corporate disclosure, compliance and consequences: evidence from Russia. European Journal of Finance, 28 (17). 1770 - 1802. ISSN 1351-847X

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Identification Number: 10.1080/1351847X.2021.2007972


Does the introduction of corporate transparency and disclosure rules in emerging economies affect compliance, and therefore earnings quality and firm performance? We explore these questions for an important emerging economy, Russia, using a natural experiment, the 2002 introduction of Russian corporate governance code. We exploit the exogenous variation in voluntary disclosure and find a significant increase in corporate disclosure among the domestic Russian firms over the period 2003–2007 when firms gradually adopted some but not all disclosure rules. The immediate effect of the introduction was a drop in reported earnings. Market valuation, however, only improved for domestic firms after 2007, when all domestic firms had complied. However, cross-listed firms, which were already satisfying international standards, remained largely unaffected. Though average compliance by domestic firms was only 53%, average firm value of treated domestic firms, relative to cross-listed ones, went up by about 10%. Results are robust, confirm external validity and offer important policy implications for other emerging/ transition economies.

Item Type: Article
Official URL:
Additional Information: © 2021 The Authors
Divisions: Management
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
JEL classification: O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O38 - Government Policy
G - Financial Economics > G3 - Corporate Finance and Governance > G30 - General
K - Law and Economics > K2 - Regulation and Business Law > K29 - Other
Date Deposited: 10 Nov 2021 12:15
Last Modified: 14 Jun 2024 05:30

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