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North Korea's threats and the cost of equity capital: The effect of information environments

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  • Kim, Yong Mi
  • Lee, Sang Hyuk

Abstract

We examine how the information environment affects the association between North Korea's threats and the cost of equity financing. Using a sample of Korean publicly-listed firms from 2012 to 2019, we find evidence that the adverse effect of North Korea's threats on the cost of equity capital is more significant for companies in less transparent information environments after controlling for other factors. Our findings contribute to the literature by identifying that the information environment affects geopolitical risk.

Suggested Citation

  • Kim, Yong Mi & Lee, Sang Hyuk, 2024. "North Korea's threats and the cost of equity capital: The effect of information environments," Finance Research Letters, Elsevier, vol. 69(PA).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324011681
    DOI: 10.1016/j.frl.2024.106139
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    References listed on IDEAS

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    More about this item

    Keywords

    Cost of equity; North Korea's threat; Geopolitical risk; Information environment;
    All these keywords.

    JEL classification:

    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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