The relationship between the information disclosure and the firms' risk exposure : a Canadian study

Abstract

This paper utilizes an event-study in order to investigate the relationship between information disclosure and firms’ risk exposure. 50 companies listed on the Toronto Exchange Stock as the samples are drawn from the whole Financial Service industry over 3 years from 2009 to 2011.By employing the disclosure index and calculating the Z-score for individual company, we analyze the characteristic of the relationship and several possibly potential causes. The results of T-test indicate that information disclosure is significantly related to the firms’ risk exposure. What is more, strategic and non-financial information is positively associated with risk exposure. While financial information has not significant impact on the risk exposure.