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The association between disclosure level and cost of capital in an emerging market: evidence from Egypt

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  • Hany Kamel
  • Tamer Shahwan

Abstract

This paper aims to empirically investigate whether the cost of equity and debt capital is related to the extent of voluntary disclosure in the Egyptian stock market. Following the previous research, a disclosure index relevant to the Egyptian environment was developed and applied in OLS regressions, using information provided in the annual reports of 73 Egyptian listed companies. The results, however, indicate that there is no significant association between the level of voluntary disclosure, on the one hand, and the cost of equity capital and debt capital, on the other. This implies that Egyptian companies do not benefit from extensive voluntary disclosure in reducing the cost of equity or debt capital. Hence, the findings of this paper may be of interest to those academic researchers, practitioners and regulators who are interested in discovering the implications of extensive voluntary disclosure in the annual reports of an emerging market such as Egypt.

Suggested Citation

  • Hany Kamel & Tamer Shahwan, 2014. "The association between disclosure level and cost of capital in an emerging market: evidence from Egypt," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 4(3), pages 203-225.
    • Handle: RePEc:ids:afasfa:v:4:y:2014:i:3:p:203-225
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    Citations

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    Cited by:

    1. Kofi Mintah Oware & T. Mallikarjunappa, 2023. "Financial Performance and Gender Diversity: The Moderating and Mediating Effect of CSR Disclosure and Expenditure of Listed Firms in India," Vision, , vol. 27(2), pages 243-255, April.
    2. Majid Jamal Khan & Faiza Saleem & Shahab Ud Din & Muhammad Yar Khan, 2024. "Nexus between boardroom independence and firm financial performance: evidence from South Asian emerging market," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
    3. Kofi Mintah Oware & Francis Donkor, 2023. "Does the Practice of Employee Volunteerism Affect Workforce Reduction and Defective Product Issues? Evidence from India," Public Organization Review, Springer, vol. 23(4), pages 1369-1383, December.
    4. Tariq H. Ismail & Yousra R. Obiedallah, 2022. "Firm performance and cost of equity capital: the moderating role of narrative risk disclosure quality in Egypt," Future Business Journal, Springer, vol. 8(1), pages 1-19, December.
    5. Kofi Mintah Oware & Harshitha Moulya & Thathaiah Mallikarjunappa, 2024. "Corporate social responsibility assurance, board characteristics and social performance disclosure. Evidence of listed firms in India," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(2), pages 1707-1721, April.
    6. Ahmed Abousamak, 2016. "Principal-principal internal governance mechanisms and the firms' performance: evidence from an emerging market," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 11(2), pages 145-169.

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