Economic consequences of adopting English for annual reports

Thomas Jeanjean, Hervé Stolowy () and Michael Erkens ()
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Michael Erkens: Computation Institute [Chicago] - University of Chicago

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Abstract: We investigate the economic consequences of increasing financial report visibility, measured by the use of English as a reporting language for firms from non-English-speaking countries. We sample 113 firms that started publishing their annual report in English (in addition to their local language) during 2004-2007 while not cross listing, not joining a major stock index or a stock index that requires external reporting in English and not engaging in major M&A activity. Taking into account the endogeneity of the reporting language, with a difference-in-differences setting and propensity score matching, and controlling for confounding factors, we find that adoption of English in the annual report is associated with lower information asymmetry, greater analyst following and more foreign investors. This suggests that language per se is an attribute of the firm's visibility.

Keywords: annual report; economic consequences; translation; English; information asymmetry; analyst following; foreign ownership; rapport annuel; conséquences économiques; traduction; anglais; asymétrie d'information; suivi des analystes; actionnariat étranger (search for similar items in EconPapers)
Date: 2012-05-21
Note: View the original document on HAL open archive server: https://hal.science/hal-00690931
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Published in Comptabilités et innovation, May 2012, Grenoble, France. pp.cd-rom

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00690931

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