Information Asymmetry Problematic and Voluntary Disclosure in Companies

Abstract

Information considered as one of the most valuable elements of today’s world is an integral part of changing and transforming living conditions. Although the information is an important asset for companies, it is also extremely important for information users. The public disclosures made by the companies have an important role in meeting the detailed information needs of the parties interested in the companies. Information asymmetry can occur between the parties, as the managers have more information about the current situation and future perspectives of the companies than the investors. At this point, information asymmetry between company and information users can be reduced with public disclosure. The purpose of this study is to examine how voluntary disclosure affects information asymmetry. In this context, 138 companies operating in the industrial index of Borsa İstanbul in Turkey were taken into consideration. As a result of the multiple linear regression analysis (stepwise method), it is found that as the voluntary disclosure levels of companies increase, the information asymmetry decreases. In addition, the Tobin Q ratio has a negative and significant effect on information asymmetry. Also, the effect of the Market Value/Book Value ratio on information asymmetry is found to be positive and significant. © 2021, The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.