Xiao guo da zhan lue: zui er wu li zou xiang guo ji da wu tai
In: Tai wan guo ji yan jiu cong shu 38
In: 台灣國際研究叢書 38
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In: Tai wan guo ji yan jiu cong shu 38
In: 台灣國際研究叢書 38
In: Journal of International Accounting Research, Band 14, Heft 2, S. 123-145
ISSN: 1558-8025
ABSTRACTApplying path analysis, we examine how eXtensible Business Reporting Language (XBRL) in China affects the cost of equity capital. Using a one-group pre- and post-test design, we find that XBRL reduces the cost of equity capital and that XBRL strengthens the direct linkage of the inverse relationship between financial reporting quality and the cost of equity capital but not the indirect linkage via the mediation of information asymmetry. Our findings also show that XBRL adoption leads to a greater reduction in the cost of equity capital, when there is a high level of corporate governance. Our study contributes to research on XBRL and to practice by documenting how XBRL affects the cost of equity capital.