Please use this identifier to cite or link to this item: http://hdl.handle.net/10125/51946

Does "Level Playing Field" Improve Real Efficiency? A Test Using Disclosure Regulation

There are no files associated with this item.

Item Summary

Title:Does "Level Playing Field" Improve Real Efficiency? A Test Using Disclosure Regulation
Authors:Jiang, Jinglin
Nanda, Vikram
Keywords:Reg FD
Price informativeness
Informational feedback
Investment to price sensitivity
Date Issued:30 Aug 2017
Abstract:The SEC promulgated Regulation Fair Disclosure (Reg FD) to establish a "level playing field" for investors through prohibiting the use of selective disclosure. We use Reg FD as a plausibly natural experiment to evaluate links between disclosure, private information production, and real efficiency. We find that the rule has an adverse impact on price informativeness, investment-to-price sensitivity, and firm value -- with stronger effects for firms with greater prior reliance on selective disclosure. Analyst forecast quality also appears to decline following the rule change. Interestingly, the impact of Reg FD on price informativeness and the sensitivity of investment-to-price diminishes over time, while the deterioration in analyst forecasts tends to persist. Collectively, the results highlight unintended consequences of Reg FD in inhibiting private information acquisition and, thereby, the informational feedback from stock prices to real decisions.
Description:Inquiries about this document can be made to HARC@hawaii.edu
URI:http://hdl.handle.net/10125/51946
Appears in Collections: 09 Financial: Manager Ability / Financial Analysts / Disclosure (FAR1)


Please email libraryada-l@lists.hawaii.edu if you need this content in ADA-compliant format.

Items in ScholarSpace are protected by copyright, with all rights reserved, unless otherwise indicated.