| dc.description.abstract | In 2019 Q1, Taiwan Stock Exchange Corporation (TWSE) proposed a regulation that all listed companies in Stock Exchange Market and Over-the-Counter Market must disclose their financial statements in inline XBRL (iXBRL) format instead of eXtensible Business Reporting Language (XBRL) format. Disclosure of financial statement in iXBRL format, compared to XBRL format can enhance readability, accuracy, flexibility of Taxonomy and reduce costs of software development in processing iXBRL instance documents.
In this paper, I use bid-ask spread as proxy of information asymmetry. I use daily stock price data to calculate bid-ask spread in the period from June to November in 2018 and the same period in 2019 in order to measure the change of information asymmetry before and after the regulation of using iXBRL format to disclose financial statements. I also compare the difference of impact between size of companies and institutional ownership. The empirical result shows: First, disclosing financial statements in iXBRL format can reduce information asymmetry. Second, compared to larger companies, ceteris paribus, smaller companies tend to benefit more from the adaption of disclosing financial statements in iXBRL format. Third, compared to firms with higher institutional ownership, ceteris paribus, firms with lower institutional ownership tend to benefit more from the adaption of disclosing financial statements in iXBRL format.
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