CULTURE AND STOCK PRICE REACTION TO PRIVATE INFORMATION

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By: ANITA TODEA
JEL: G14, G15
Keywords: price informativeness, private information, individualism, uncertainty avoidance, firm-specific information, financial opennes.

This paper examines the impact of culture on stock price informativeness in a sample of firms from 23 developed stock markets. We find that the information content of private information in stock prices is higher in more individualistic countries and in low uncertainty-avoiding countries. Moreover, financial openness stimulates the incorporation of private information into individualistic countries and in low uncertainty-avoiding countries.