Literature Review for Corporate Information Asymmetry

• Main Authors: Cheng-Ying Tsai, 蔡承穎
• Other Authors: Yong-Chin Liu
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/82448457554514849865

碩士 === 亞洲大學 === 財務金融學系碩士在職專班 === 103 === The study reviews the literature about information asymmetry, including the definition, reasons, and measures for the information asymmetry, as well as the impact of the information asymmetry. Information asymmetry means that securities buyers and sellers cannot fully understand the opponent's information when they trade, or the company's insiders have more firm-related information than outsiders do. Past literature mentioned factors affecting the degree of information asymmetry; the study classifies them from viewpoints of people, time, thing, place, and object. The thing viewpoint matters most, including the level of the enterprise information disclosure, , audit and financial report quality, financial conditions, business growth, stock’s turnover rate, stock’s risk and its premium, the extent of the company's business and product diversification, corporate conference, etc. The literature can make readers to completely understand how to reduce information asymmetry and improve the degree of information p transparency. The study also explores the measures of information asymmetry, including indirect and direct methods. The former uses some specific indexes to measure information asymmetry, for example, the time length firm’s stock listed, non-systematic risk, etc.; the latter uses the probability that firm has an advantage to trade using private information. Understanding various measures provides readers more and detailed references in measuring information asymmetry; also, according to their logic, readers can develop new methods to measure information asymmetry. Information asymmetry causes a lot of influences, such as trading risk, market liquidity, the company's dividend policy, financing and investment decisions, earnings management, corporate governance, the impact on the value of the company, etc. The related literature is reviewed in detail in this study.