The Impact of Web-Based Disclosure on the Capital Market Risk
Montpellier business school, Montpellier, France
- *Corresponding Author:
- Li L
Montpellier business school, 34080 Montpellier, France
Tel: +33 4 67 10 25 00
E-mail: [email protected]
Received Date: March 08, 2016; Accepted Date: March 17, 2016; Published Date: March 20, 2016
Citation: Li L (2016) The Impact of Web-Based Disclosure on the Capital Market Risk. Int J Account Res 3:124. doi:10.4172/ijar.1000124
Copyright: © 2016 Li L. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
This paper evaluates the Web-based voluntary disclosure practices in a sample of 180 French listed firms. The main objective is to investigate the impact of Internet-based disclosure on capital market risk. Three measures are used to present the capital market risk: total risk is measured by the standard deviation of stock returns, and systematic risk and idiosyncratic risk are the beta and standard deviation of the residuals generated from the market model, respectively. Following the method of Gajewski and Li, the Web-based disclosure is measured by an index of 40 items. The empirical results show that total risk and idiosyncratic risk vary inversely with the strength of Internet disclosure. This indicates that improved online disclosure can reduce investors’ uncertainty in the capital market. However, systematic risk is not influenced by the disclosure practice. Furthermore, capital concentration and board size are negatively associated with total and idiosyncratic risk. This study extends the prior research by investigating the influence of online disclosure on capital risk in the French stock market. I am particularly concerned about the technical features of Internet disclosure and its impact on capital risk. Online information is generally considered to be user-friendly, yet it is now necessary to analyze the effect of this convenience provided by Internet technology on the capital market.