Title: The interrelationships between corporations' dependence on external financing, information disclosure and cost of capital

Authors: Fu-Ju Yang, Chien-Ting Han, Her-Jiun Sheu

Addresses: Department of Banking and Finance, Chinese Culture University, 55 Hwa Kang Road, 111 Taipei, Taiwan. ' Department of Accounting, National Taiwan University, 1, Sec. 4, Roosevelt Rd., 106 Taipei, Taiwan. ' Department of Management Science and Graduate Institute of Finance, National Chiao Tung University, 118 Chung Hsiao W. Road, 100 Taipei, Taiwan

Abstract: The paper tests the relationship between corporations| dependence on external financing and their level of corporate information disclosure, and the relationship between the cost of capital and the level of corporate information disclosure in the Integrated Circuit (IC) industry in Taiwan. Using a sample of 108 companies, it is found that firms with greater external financing have more incentives to provide higher information disclosure levels. Further, an active disclosure policy would lead to a lower cost of both debt and equity capital.

Keywords: external financing; information disclosure; cost of capital; website information; electronic finance; e-finance; integrated circuits; debt; equity capital; Taiwan.

DOI: 10.1504/IJEF.2008.021801

International Journal of Electronic Finance, 2008 Vol.2 No.4, pp.383 - 403

Published online: 04 Dec 2008 *

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