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Publications
  • May 2004
  • Article
  • Journal of Accounting Research

Disclosure Practices of Foreign Companies Interacting with U.S. Markets

By: Tarun Khanna, Krishna G. Palepu and Suraj Srinivasan
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Abstract

We analyze the disclosure practices of companies as a function of their interaction with the U.S. markets for a group of 794 firms from 24 countries in Asia-Pacific and Europe. Our analysis uses the Transparency and Disclosure scores developed recently by Standard & Poor's. These scores rate the disclosure of companies from around the world using U.S. disclosure practices as an implicit benchmark. Results show a positive association between these disclosure scores and a variety of market interaction measures, including US Listing, US investment flows, export to and operations in the US. Trade with US, however, has an insignificant relationship with the disclosure scores. Our empirical analysis controls for the previously documented association between disclosure and firm size, performance, and country legal origin. Our results are broadly consistent with the hypothesis that cross-border economic interactions are associated with similarities in disclosure and governance practices.

Keywords

Management Practices and Processes; Markets; Investment; Size; Performance; Cross-Cultural and Cross-Border Issues; Corporate Governance; Corporate Disclosure; Trade; United States; Asia; Europe

Citation

Khanna, Tarun, Krishna G. Palepu, and Suraj Srinivasan. "Disclosure Practices of Foreign Companies Interacting with U.S. Markets." Journal of Accounting Research 42, no. 2 (May 2004).
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About The Authors

Tarun Khanna

Strategy
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Krishna G. Palepu

Accounting and Management
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Suraj Srinivasan

Accounting and Management
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More from the Authors
  • Swvl: Smart Mobility for the Masses By: Krishna Palepu, Esel Çekin and Menna Hassan
  • Is Hybrid Work the Best of Both Worlds? Evidence from a Field Experiment By: Prithwiraj Choudhury, Tarun Khanna, Christos A. Makridis and Kyle Schirmann
  • DealShare: Social E-Commerce for the Indian Mass Market By: Krishna G. Palepu and Malini Sen
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