Information asymmetry and cost of equity: the roles of CEO power, ownership structure, and board competence

Abstract Information asymmetry remains a significant barrier to market efficiency by eroding investor confidence and elevating perceived risk. This study examines how CEO power, Female CEO leadership, ownership structure, and board competence affect information asymmetry in Thai listed firms during the period 2019–2022. A key contribution of this study is the development of a composite CEO power index, which captures multiple dimensions of leadership power based on executives’connections and experience, thereby offering a more comprehensive assessment than traditional single-measure approaches. The results reveal that CEO power is negatively and significantly associated with information asymmetry, suggesting that powerful CEOs may strengthen internal control and improve decision-making transparency. However, when the CEO is female, information asymmetry tends to increase, which may reflect investor uncertainty and persistent gender-based biases in leadership perceptions within emerging market contexts such as Thailand. Managerial ownership is positively associated with information asymmetry, indicating that managers with higher ownership stakes may limit information disclosure to protect private benefits. In contrast, board industry and financial competence enhance oversight and transparency. Consequently, the analysis demonstrates that firms with higher levels of information asymmetry face higher costs of equity, as investors demand additional compensation for increased information risk. By focusing on Thai listed firms, this study contributes evidence from an emerging market context, highlighting how corporate governance structures influence information environments and capital market outcomes.