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CAPITAL MARKETS UNION: FACTORS AFFECTING FINANCIAL INFORMATION RELEVANCEDownload This Article
Vincenzo Foglia Manzillo
This study examines the European capital markets and the differences in the way in which share prices reflect financial information in light of the European project “Capital Markets Union”. Findings suggest that diversity exists and enforcement regime affects the above relationship. In particular, Small and Medium Enterprises (SMEs) are characterized by a weak relationship between prices and accounting information compared to large issuers, but this relationship enhance if the SMEs have an institutional investor as significant shareholder. Finally, findings reveal that whether there are ratings or analyst coverage on an issuer, prices are more linked to expected net income instead of the historical data. These results confirm the goodness of the action plan of building a Capital Markets Union.
Keywords: Capital Markets Union, SME, Institutional Investor
How to cite this paper: Manzillo, V. F. (2016). Capital markets union: Factors affecting financial information relevance. Corporate Ownership & Control, 14(1-4), 588-604. http://doi.org/10.22495/cocv14i1c4art5