IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v71y2024ics0275531924002708.html
   My bibliography  Save this article

Internal information asymmetry and power distance

Author

Listed:
  • Ni, Yingzhao
  • Ding, Wenjie
  • Li, Donghui
  • Xing, Lu

Abstract

Using the difference in insider trading profitability between top and lower-level managers to proxy for firms’ internal information asymmetry, we show that power distance increases internal information asymmetry in an international sample of 10,103 firms across 22 economies from 2003 to 2018. Furthermore, we find that this positive impact is lessened for firms with less complexity, more female directors on board, or an internal CEO promoted from within the firm. Moreover, we show that a country’s high-quality formal institutions lessen the role that a country’s culture of power distance plays in escalating internal information asymmetry. Our main conclusions remain valid after taking into account robustness and endogeneity issues.

Suggested Citation

  • Ni, Yingzhao & Ding, Wenjie & Li, Donghui & Xing, Lu, 2024. "Internal information asymmetry and power distance," Research in International Business and Finance, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:riibaf:v:71:y:2024:i:c:s0275531924002708
    DOI: 10.1016/j.ribaf.2024.102477
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531924002708
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2024.102477?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chuan Zhang & Yueyun Wang, 2024. "Non-financial information farsightedness and capital market information efficiency," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-19, December.

    More about this item

    Keywords

    National culture; Power distance; Internal information asymmetry; Insider trading;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • Z10 - Other Special Topics - - Cultural Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:71:y:2024:i:c:s0275531924002708. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.