IDFM

• Ref.: PID2021-123748NB-I00
• Principal Investigator: Ariadna Dumitrescu
• Research group: GREF
• Funding body: Generación de Conocimiento 2021 Ministerio Ciencia e Innovación
• Funding: 34.303,50 €
• Duration: 36 months

Summary: 

Information disclosure is a central issue in the recent policy and regulatory debate, as it is generally considered to play a fundamental role in promoting market efficiency. Disclosure represents the extent to which all relevant information regarding the firm is made public and available to all economic agents in a timely manner. The information disclosed can be information impounded in the trading process in the financial market (stock prices, transaction prices, the volume of those transactions and the identity of the order flow) or information about fundamental value of financial assets (financial, accounting and auditing reports, information on shareholders, corporate governance or Environmental, Social and Governance (ESG) information). Both these types of disclosure are essential in the corporate and financial world because it ensures market transparency, reduces information asymmetry, reduces market manipulation, allows investors to make informed decisions and permits more efficient allocation of capital. The main objective of the project is to provide novel theoretical and empirical evidence on the economic and financial effects of market transparency and firms information disclosure.

Our aim is to provide a better understanding of how information disclosure shapes the structure of financial markets, their efficiency, and the welfare impact on market participants. We explore these problems from a microeconomic perspective looking at different types of information disclosure both from the firms and from the investors point of view. In particular, we plan to structure our analysis into two lines of research: one in which we study the information produced in the trading process and one in which we study the information disclosed by firms. These two lines of research have a common goal of analysing the effects of information disclosure on market performance and welfare of market participants.