A peculiar carry over transaction facility has been associated with emerging markets of India and Pakistan. We show that the trading facility can be considered a market response to the information gaps in these markets. Information can be credibly transmitted through this trading facility....

This study examines the relationship between equity analysts and information asymmetry, and the extent of leakages in analyst recommendations. Literature suggests that analysts reduce information asymmetry by bringing privately held information to the market, and through superior analysis of...

The 2007 subprime crisis in the U.S. triggered a succession of financial crises around the globe, reigniting interest in the contagion phenomenon. Not all crises, however, are contagious. This paper models a new channel of contagion where the degree of anticipation of crises, through its impact...

This paper analyzes an Easley and O'Hara (1992) type sequential trading model in an evolutionary setting. We assume that the memory of a market maker is limited, and that traders endogenously choose whether to acquire private information with a fixed cost. We show that the ratio of the informed...

This paper explores the degree to which imperfect information in the labour market regarding worker quality is likely to impact employment opportunities, as well as the wages associated with those opportunities. The primary purpose of this paper is to provide preliminary empirical evidence that...

This paper develops a two-way director-firm fixed effect model to study the relationship between independent directors' individual heterogeneity and firm operating performance, using French data. This strategy allows considering and differentiating in a unified empirical framework mechanisms...

In 2008, the FASB and the IASB, in collaboration, issued an exposure draft of a conceptual framework for financial reporting. The boards agree that decision-useful information should be the main feature of financial reporting. The boards ignore, however, the fact that information asymmetry,...

The capital market has an important role at the micro and macro economical level, having the capacity to mobilize resources and to place them in a productive manner. The relation between accounting and capital market started to be analyzed from the middle of XXth century, when the investors...

We examine the effect of information asymmetry on equity prices in the local A- and foreign Bshare market in China. We construct measures of information asymmetry based on market microstructure models, and find that they explain a significant portion of cross-sectional variation in B-share...

In today's markets where high frequency traders (HFTs) act as both liquidity providers and takers, I argue that information asymmetry induced by liquidity-taking HFTs' use of machine-readable information is important. This particular type of information asymmetry arises because some machines may...