Policy Uncertainty and Corporate Voluntary Disclosure

Abstract

This study examines how policy uncertainty affects the nature and timing of corporate voluntary disclosure. Using a news-based index of policy uncertainty, we find that during periods of high uncertainty, managers are less likely to provide earnings forecasts but are more likely to issue non-earnings forecasts. Policy uncertainty also increases managers’ propensity to disclose non-GAAP earnings and attend corporate access events, which facilitate face-to-face interactions between managers and capital market participants. Moreover, managers alter disclosure timing by providing information in shorter windows but after hours. Our results suggest that during periods of high policy uncertainty, managers alter their disclosure strategy by using a multifaceted approach to meet investors’ information demand.