This paper examines the economic consequences of increased disclosure by German firms that switch from German GAAP to either International Accounting Standards (IAS) or US-GAAP. The authors hypothesize that increased disclosure should reduce the information asymmetry component of the firm's cost of capital, leading to lower bid-ask spreads and higher trading volume. Using a cross-sectional analysis of 102 DAX 100 firms, they find that firms following international reporting strategies exhibit significantly lower bid-ask spreads and higher trading volume compared to those using German GAAP. However, they do not find a significant reduction in share price volatility. The study also explores alternative explanations and performs robustness checks, confirming the validity of their findings. The results suggest that increased disclosure can lead to measurable economic benefits, supporting the theoretical link between disclosure and cost of capital.This paper examines the economic consequences of increased disclosure by German firms that switch from German GAAP to either International Accounting Standards (IAS) or US-GAAP. The authors hypothesize that increased disclosure should reduce the information asymmetry component of the firm's cost of capital, leading to lower bid-ask spreads and higher trading volume. Using a cross-sectional analysis of 102 DAX 100 firms, they find that firms following international reporting strategies exhibit significantly lower bid-ask spreads and higher trading volume compared to those using German GAAP. However, they do not find a significant reduction in share price volatility. The study also explores alternative explanations and performs robustness checks, confirming the validity of their findings. The results suggest that increased disclosure can lead to measurable economic benefits, supporting the theoretical link between disclosure and cost of capital.