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Replacement cost disclosures, information asymmetry and market-maker behaviour: Assessment through the bid-ask spread

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  • Venkateswar, Sankaran

Abstract

Until recently, the evaluation of the information events in accounting have been restricted to a study of their impact on the characteristics of stock prices (e.g., Ball & Brown, 1968;Beaver, 1968;Lev, 1988). Among others, Venkatesh & Chiang (1986) suggest an alternate method to evaluate such information events. Taking their lead, this study analyses an accounting disclosure event through its impact on market-maker behaviour. Specifically, this study empirically tests the perceived informativeness of Securities and Exchange Commission (SEC) mandated Replacement Cost (RC) disclosures made in 1976. Inference is made through a relatively new bid-ask methodology.

Suggested Citation

  • Venkateswar, Sankaran, 1992. "Replacement cost disclosures, information asymmetry and market-maker behaviour: Assessment through the bid-ask spread," The British Accounting Review, Elsevier, vol. 24(2), pages 139-155.
    • Handle: RePEc:eee:bracre:v:24:y:1992:i:2:p:139-155
    DOI: 10.1016/S0890-8389(05)80005-8
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