The influence of corporate disclosure on investor confidence
in Thai listed companies.
University of Southampton, School of Management,
The thesis is a study of corporate disclosure and stock market liquidity in Thailand. It uses a two-phase exploratory design in which the results from the qualitative method phase of the study are used to inform the quantitative method phase. The qualitative phase of the study aims to gain an understanding of corporate disclosure and the sources of information used of by financial analysts and the fund managers in Thailand. Specifically, it explores the use financial analysts and fund managers make of different sources and channels of communication, and their views on the purpose and the quality of disclosure and of the reasons why companies may choose to disclose information voluntarily. It also explores financial analysts’ and fund managers’ perceptions about the value of the audit report. The qualitative study is based upon interviews with financial analysts and fund managers working in Thailand and uses grounded theory to analyse the interview material. The quantitative phase of the study examines the relationship between the voluntary information disclosure by Thai listed companies and stock market liquidity. In particular, it examines the relationship between stock market liquidity and: (i) categories of information disclosure; and (ii) channels of information disclosure. It also examines the relationship between information disclosure and: (i) audit firm size, and (ii) analyst following. Disclosure is measured in two ways: first using ratings by financial analysts and fund managers of companies’ public and private disclosures and second by means of a disclosure index. Stock market liquidity is measured using information obtained from the Stock Exchange of Thailand ‘SET Market Analysis and Reporting Tool’ database. The empirical results show strong evidence to indicate that disclosing more voluntary information, particularly through public disclosure, reduces information asymmetry, improves investor confidence and enhances the stock market liquidity. In addition to the results of the primarily investigation, this study also finds that there is a significant and positive relationship between the audit firm size and the level of voluntary information disclosure. Moreover, the results report that not all sections of information disclosure are related to the size of analyst following
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