Annual report readability and stock return synchronicity: Evidence from India
AbstractThis study investigates the relationship between the comprehensibility of a firm’s annual report and its stock return synchronicity in the Indian market. The study employs the readability of annual reports as a measure for the cost of information processing. The findings suggest that firms w...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Taylor & Francis Group
2023-12-01
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| Series: | Cogent Economics & Finance |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23322039.2023.2186034 |
| _version_ | 1827792153614483456 |
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| author | Vismaya Gangadharan Lakshmi Padmakumari |
| author_facet | Vismaya Gangadharan Lakshmi Padmakumari |
| author_sort | Vismaya Gangadharan |
| collection | DOAJ |
| description | AbstractThis study investigates the relationship between the comprehensibility of a firm’s annual report and its stock return synchronicity in the Indian market. The study employs the readability of annual reports as a measure for the cost of information processing. The findings suggest that firms with more readable annual reports tend to display higher stock return synchronicity. This relationship implies that more legible financial disclosures are associated with more efficient and transparent capital markets. Additionally, the research discovered that the relationship between readability and stock return synchronicity is particularly pronounced for companies with high institutional investment, high analyst coverage, and lower information asymmetry. The sample size of the study encompasses NSE 500 companies for the period 2015–2016 to 2019–2020. |
| first_indexed | 2024-03-11T17:57:49Z |
| format | Article |
| id | doaj.art-376477795eae4956b554ec57f06edbe5 |
| institution | Directory Open Access Journal |
| issn | 2332-2039 |
| language | English |
| last_indexed | 2024-03-11T17:57:49Z |
| publishDate | 2023-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Economics & Finance |
| spelling | doaj.art-376477795eae4956b554ec57f06edbe52023-10-17T10:51:07ZengTaylor & Francis GroupCogent Economics & Finance2332-20392023-12-0111110.1080/23322039.2023.2186034Annual report readability and stock return synchronicity: Evidence from IndiaVismaya Gangadharan0Lakshmi Padmakumari1Finance and Accounting area, IFMR GSB, Krea University, Sricity, IndiaFinance and Accounting area, IFMR GSB, Krea University, Sricity, IndiaAbstractThis study investigates the relationship between the comprehensibility of a firm’s annual report and its stock return synchronicity in the Indian market. The study employs the readability of annual reports as a measure for the cost of information processing. The findings suggest that firms with more readable annual reports tend to display higher stock return synchronicity. This relationship implies that more legible financial disclosures are associated with more efficient and transparent capital markets. Additionally, the research discovered that the relationship between readability and stock return synchronicity is particularly pronounced for companies with high institutional investment, high analyst coverage, and lower information asymmetry. The sample size of the study encompasses NSE 500 companies for the period 2015–2016 to 2019–2020.https://www.tandfonline.com/doi/10.1080/23322039.2023.2186034Annual report readabilityAnalyst followingInstitutional investorsInformation asymmetrySynchronicityG10 |
| spellingShingle | Vismaya Gangadharan Lakshmi Padmakumari Annual report readability and stock return synchronicity: Evidence from India Cogent Economics & Finance Annual report readability Analyst following Institutional investors Information asymmetry Synchronicity G10 |
| title | Annual report readability and stock return synchronicity: Evidence from India |
| title_full | Annual report readability and stock return synchronicity: Evidence from India |
| title_fullStr | Annual report readability and stock return synchronicity: Evidence from India |
| title_full_unstemmed | Annual report readability and stock return synchronicity: Evidence from India |
| title_short | Annual report readability and stock return synchronicity: Evidence from India |
| title_sort | annual report readability and stock return synchronicity evidence from india |
| topic | Annual report readability Analyst following Institutional investors Information asymmetry Synchronicity G10 |
| url | https://www.tandfonline.com/doi/10.1080/23322039.2023.2186034 |
| work_keys_str_mv | AT vismayagangadharan annualreportreadabilityandstockreturnsynchronicityevidencefromindia AT lakshmipadmakumari annualreportreadabilityandstockreturnsynchronicityevidencefromindia |