The growing emphasis of relying on technology in the production of financial reports and the drastic effects blockchain technology potentially can have on this process was found highly relevant by the authors. This coupled with the growing interest of contemporary literature on disclosure levels’ relevance for firms and its stakeholders motivated this thesis. On this basis, the objective was to investigate the relationship between disclosure quality and the related capital market effects. In order to analyze the research objective, the paper comprehensively covers existing disclosure theory and theory on the use of financial information from an investor perspective. From this, it was found that the most apparent capital market effects are related to disclosures' ability to reduce information asymmetry and hence facilitate increased liquidity and decreased cost of capital of firms. This relationship was consequently hypothesized and empirically tested. Also, as we suspected that disclosure levels have been increasing historically, as well as the notion that disclosure levels vary across industries, these relationships were also investigated. In order to empirically test the formulated hypothesis, several regression analyses were conducted, and quality tests were conducted. Here it was found that disclosure quality, defined as the disaggregation level of financial statements (DQ), had been significantly increasing over time, as well as significantly varying across industries, why the following analysis needed to control for these fixed effects. With this in mind, a significant positive relationship between DQ and liquidity was found as well as significant negative relationships between cost of equity, cost of debt, and cost of capital. These findings were ultimately related to the attributes of blockchain technology, where the possible effects of an emergence of blockchain accounting systems were discussed. Here it was detected that a drastic increase in disclosure quality and levels could be expected. This will most likely benefit many stakeholders as information asymmetry is reduced, however, a risk of a possible information overflow was also identified. Also, the role of auditors can be expected to change drastically. Finally, the increased transparency was found to give potential competitive drawbacks for firms, which may prevent a total utilization of blockchain technology's ability to increase transparency in the capital market and hence reduce information asymmetry.
|Uddannelser||Cand.merc.fsm Finance and Strategic Management, (Kandidatuddannelse) Afsluttende afhandling|