Have East Asian Companies Improved their Information Environments?

Since the Asian crisis, East Asian companies have been encouraged to improve their disclosure practices, thereby increasing the availability of operating, financial and corporate governance information to market participants. This research examines whether East Asian companies have improved their information environments since both the crisis and the introduction of corporate governance codes. The results show that the introduction of codes has been associated with a shift in analyst following towards smaller companies and an overall reduction in analyst forecast error. This indicates an overall improvement and a levelling out of information environments across companies. These results are also reflected in the weakened relationships between analyst following, analyst forecast error and market value.