Equity market information asymmetry and the small firm

  • Bruce Dwyer

Student thesis: Doctoral Thesis


Capital markets are affected by information asymmetry when one party (typically the manager or owner) has relevant knowledge that the other party (typically the investor) does not. This may result in adverse selection, whereby potential investors mitigate uncertainty by progressively discounting equity prices as the level of information asymmetry increases. The adverse effect of information asymmetry on asset prices of large corporations has been studied extensively Leland and Pyle (1977); (Reinganum & Smith 1983; Myers & Majluf 1984b; Clarke et al. 1999; Baker & Wurgler 2007), but its effects on small firms remain under-researched. This study explores the impact of information asymmetry on both the demand and supply of small-scale equity funding.
Date of Award16 Jun 2018
Original languageEnglish
SupervisorColette Southam (Supervisor) & Keith Duncan (Supervisor)

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