Is Silence Golden? Real Effects of Mandatory Disclosure

• 成果类型: Article
• 署名作者: Jayaraman, Sudarshan; Wu, Joanna Shuang
• 署名单位: University of Rochester
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhy088
• 发表日期: 2019
• 页码: 2225
• 关键词: stock-prices; INVESTMENT SENSITIVITY; information asymmetry; REPORTING FREQUENCY; financial-markets; capital-market; AGENCY COSTS; PROTECTION; returns; time

摘要

Mandatory disclosure provides benefits, but it also entails costs. One cost concerns managerial learning: by discouraging informed trading, disclosure could reduce managers' ability to glean decision-relevant information from prices. Using mandatory segment reporting in the United States, we uncover a reduction in investment-q sensitivity, indicating lower investment efficiency after regulation. Consistent with learning, lower sensitivity is concentrated in firms with more informed trading and lower financing constraints. Constrained firms exhibit no change in investment-q sensitivity, suggesting that they enjoy countervailing benefits via greater financing and stronger governance. Overall, we document a novel link between mandatory disclosure and real effects.