13 The incentive to provide more complete financial
statements tends to be greatest for those emerging market
companiesthathavelistingsin developedmarkets.Chinese
companieslistedintheUnitedStates,forinstance,providefar
more information on performance and governance than
Chinese companies that are listed only in Shanghai.
14 A.Riahi-Belkaoui,“Politically-ConnectedFirms:AreThey
Connected to Earnings Opacity?,” working paper, SSRN,
2003.
15 Thereisclearlythesensitiveissueofwhentaxavoidance
becomestaxevasion.Wedonothavetheexpertisetomake
that legal judgment.
16 A.Alamazan,J.Suarez,andS.Titman,“CapitalStructure
and Transparency,” working paper, SSRN, 2002.
17 “Wejusttookthedebtoffthebookstoreducetheinterest
ratethatwepay,”theywillclaim,“butwedidmentionitina
footnote.”Inresponse,wewouldarguethatinvestorsshould
nothavetotrollthroughfootnotestofindouthowmuchthe
firm owes.
18 J.Kurtzman,G.Yago,andT.Phumiwasana,“TheGlobal
Costs of Opacity,” MIT Sloan Management Review 46
(2004): 38–44.
19 S.A.PatelandG.Dallas,“TransparencyandDisclosure:
Overview and Methodology and Study Results—United
States,”Standard and Poor’s Publication, 2002.