Work

Do anti‐bribery laws reduce the cost of equity? Evidence from the UK Bribery Act 2010

Year: 2020

Type: article

Abstract: We examine the impact of the UK Bribery Act 2010 on the implied cost of equity. We find a significant reduction in the cost of equity amongst UK firms with high bribery exposure after the passage of the Bribery Act. We further show that the Bribery Act improves internal control systems and increases stock liquidity of firms with high bribery exposure. Our results suggest that more stringent anti‐bribery regulations are not always bad for the firm.

Source: Journal of Business Finance &amp Accounting

DOI: 10.1111/jbfa.12434

Authors: Suhee Kim, William Rees, Vathunyoo Sila

Institution: University of Edinburgh

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: hybrid

Estimated APC paid: $2,900