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A Peer-reviewed scientific articles/A1 Journal article (refereed), original research
      
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Comparing financial transparency between for-profit and nonprofit suppliers of public goods: Evidence from microfinance, Journal of International Financial Markets, Institutions and Money January (2020). Goodell, John W.; Goyal, Abhinav; Hasan, Iftekhar


Category A Peer-reviewed scientific articles
Sub-category A1 Journal article (refereed), original research
auki Internal authors
All authors as text Goodell, John W.; Goyal, Abhinav; Hasan, Iftekhar 
Number of authors
Status Published
Year of publication 2020 
Date 15.01.2020 
Name of article Comparing financial transparency between for-profit and nonprofit suppliers of public goods: Evidence from microfinance 
Name of journal Journal of International Financial Markets, Institutions and Money
Volume of issue 64 
Number of issue January 
Abstract Previous research finds market financing is favored over relationship financing in environments of better governance, since the transaction costs to investors of vetting asymmetric information are thereby reduced. For industries supplying public goods, for-profits rely on market financing, while nonprofits rely on relationships with donors. This suggests that for-profits will be more inclined than nonprofits to improve financial transparency. We examine the impact of for-profit versus nonprofit status on the financial transparency of firms engaged with supplying public goods. There are relatively few industries that have large number of both for-profit and nonprofit firms across countries. However, the microfinance industry provides the opportunity of a large number of both for-profit and nonprofit firms in relatively equal numbers, across a wide array of countries. Consistent with our prediction, we find that financial transparency is positively associated with a for-profit status. Results will be of broad interest both to scholars interested in the roles of transparency and transaction costs on market versus relational financing; as well as to policy makers interested in the impact of for-profit on the supply of public goods, and on the microfinance industry in particular.
Free text descriptor in Finnish yritykset; rahoitus; mikrorahoitus; avoimuus; läpinäkyvyys; voitot; tuotot; julkishyödykkeet; yleishyödylliset yhteisöt; transaktiokustannukset 
Free text descriptor in English Financial transparency; Nonprofits; Market versus relationship financing; Microfinance institutions 
JEL-codes G10; G14; G24; H41; M14; O16 
ISSN / e-ISSN 1042-4431 
auki Internet addresses
Additional information Available online 8 November 2019
Open Access Not known