International evidence on the impact of adopting English as an external reporting language

Thomas Jeanjean 1 Hervé Stolowy 2 Michael Erkens 2 Teri Lombardi Yohn 3
1 ESSEC Business School
2 GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC
3 Kelley School of Business
Abstract : This study investigates the economic consequences of non-English-speaking companies adopting English as an external reporting language. We examine a sample of European companies that initiate the voluntary issuance of an annual report in English in addition to the local language annual report. To control for self-selection, we use a difference-in-differences design with a propensity score matched control sample. We find that adoption of English as an external reporting language is associated with increased foreign ownership, decreased information asymmetry, and increased analyst following. We also find that these benefits are not conditional on the use of IFRS for financial reporting. Our findings hold if we run a number of robustness checks to control for correlated events (creation of an investor relations service, provision of conference calls, and/or changes in management). These results are consistent with the language used in the annual report acting as a barrier to investment for some investors and with annual reports issued in English reducing investors’ information processing costs.
Keywords : English language annual report foreign ownership information asymmetry analyst following
Type de document :
Article dans une revue
Journal of International Business Studies, Palgrave Macmillan, 2015, 46 (4), pp.180-205. 〈10.1057/jibs.2014.33〉
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https://hal-hec.archives-ouvertes.fr/hal-01147676
Contributeur : Antoine Haldemann <>
Soumis le : jeudi 30 avril 2015 - 19:13:14
Dernière modification le : lundi 12 février 2018 - 15:36:01

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HEC | ESSEC | PARISTECH | UNIV-PARIS-SACLAY

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Thomas Jeanjean, Hervé Stolowy, Michael Erkens, Teri Lombardi Yohn. International evidence on the impact of adopting English as an external reporting language. Journal of International Business Studies, Palgrave Macmillan, 2015, 46 (4), pp.180-205. 〈10.1057/jibs.2014.33〉. 〈hal-01147676〉

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