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EU directive on the harmonization of transparency requirements for quoted companies
has a positive impact on the quality of information
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Friday, 11/12/2021
The discussion on the effects of regulation on the functioning of capital markets is long and far from being consensual. In this regard, Gilberto Loureiro, professor at the School of Economics and Management, University of Minho, and researcher at Centre for Research in Economics and Management (NIPE), and Sónia Silva, also a researcher at NIPE, developed a study on the impact of EU directives, particularly the Transparency Directive (TPD) which aims to improve the quality of information disclosed by companies through their financial reporting, in the informational environment surrounding the announcement of acquisitions involving the shares of the acquiring companies as the principal method of payment.
This study demonstrates evidence of a significant increase in the profitability of European acquirers, coinciding with the dates of announcements of these acquisitions after the change in regulation. It was also documented that this result is mainly due to firms with better information quality and to firms domiciled in EU countries with better institutional quality and whose legal environment provides superior protection to shareholders. The results suggest that the same regulation has different effects depending on the country where it is implemented. In this context, Gilberto Loureiro points out that "differences in the quality of institutions in EU countries affect the effectiveness of regulation. For the directives to produce the desired effects, it is important to invest in improving the quality of national institutions" to foster the harmonization process between national legislation and European directives to achieve deeper integration of the capital markets of the EU member states.
The article can be found at
https://doi.org/10.1016/j.intfin.2021.101374
Gabinete de Comunicação
Escola de Economia e Gestão
Universidade do Minho
Telefone: 253 604541
e-mail:
gci@eeg.uminho.pt
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