Information-Processing Costs and Breadth of Ownership

• 成果类型: Article
• 署名作者: Kim, Jeong-Bon; Li, Bing; Liu, Zhenbin
• 署名单位: City University of Hong Kong; University of Waterloo; Hong Kong Baptist University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12451
• 发表日期: 2019
• 页码: 2408-2436
• 关键词: reporting complexity; xbrl; disclosure; investors; INVESTMENT; IMPACT; FIRMS; acquisition; liquidity; assurance

摘要

Using the U.S. Securities and Exchange Commission's mandate of eXtensible Business Reporting Language (XBRL) as a natural experiment, this study investigates whether and how the decreased information-processing costs brought about by XBRL influence firms' breadth of share ownership. We find that the XBRL mandate is associated with an increase in the total number of a firm's shareholders. This finding is consistent with the notion that XBRL facilitates a more transparent environment and decreases information-processing costs, thereby attracting more shareholders in general. More interestingly, we find that while XBRL adoption is associated with an increase in share ownership of individual and non-U.S. foreign institutional investors, it is associated with a decrease in share ownership of U.S. domestic institutional investors. Further evidence shows that this asymmetric shift in share ownership is more pronounced for more complex firms. Our findings, taken together, suggest that the decreased information-processing costs brought about by XBRL help firms establish a level playing field by reducing the information disadvantages of individual and foreign institutional investors over domestic institutional investors. Our results are robust to potential endogeneity concerns and alternative research designs.