Stock Market Liberalization and the Information Environment

We study the associations between openness to foreign equity investors and the information environment facing emerging market firms. Changes in openness are reflected in legal, regulatory, and cross-listing events, the fraction of stock available to foreign investors, and the size of U.S. portfolio capital flows. The information environment is reflected in firm-specific return volatility and in indicators of information production, uncertainty, and disagreement related to earnings announcements. We find that information measures typically increase with openness to foreign equity investment, particularly in the form of security cross-listings and aggregate portfolio flows