A Review On Disclosure Practices - 1726 Words

A Review of Disclosure Practices of Latin American Companies Abstract This paper analyzes current practices in several Latin American countries in the areas of corporate disclosure and transparency by focusing on the extent to which information is disclosed to investors through public channels, such as websites. We find weak disclosure practices, which will continue to prove problematic for capital flows and the future development of these countries. Specifically, poor disclosure practices lead to reluctance on the part of investors to invest in these companies, high costs of capital and poor valuations. Latin American firms should be encouraged to voluntarily increase disclosure, select independent boards, and enforce disciplinary†¦show more content†¦Such practices become even more important for emerging economies, as these countries aim to mobilize capital and achieve economic growth. Among emerging economies, the Latin American region is of significant concern. These economies struggle with below potential economic growth and inability to attract and keep investments, ultimately leading to increased poverty levels and loss of output which further damage investments and growth. In this context, disclosure and transparency are critical tools that governments and corporations must focus on to help investors feel confident about making business in the region. The purpose of this paper is to provide a review of current corporate disclosure practices in Latin American countries by focusing on the extent to which information is disclosed to investors through public channels. We begin by reviewing the prior research in this field, and then proceed to presenting the data collected and to interpreting our findings. Prior Research Until recently, many believed that Latin America was a story of economic success. Year 2004 marked the start of the so-called Latin American decade, one where the region experienced exceptional economic growth and social progress. Capital flows had returned to Latin America in the 1990s following the debt crisis and return to democracy of the 1980s, the region also experienced long-term improvements in human