Institutional Ownership, Peer Pressure, and Voluntary Disclosures

• 成果类型: Article
• 署名作者: Lin, Yupeng; Mao, Ying; Wang, Zheng
• 署名单位: National University of Singapore; Lingnan University; City University of Hong Kong
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-51945
• 发表日期: 2018
• 页码: 283-308
• 关键词: MANAGEMENT EARNINGS FORECASTS; regression-discontinuity; CORPORATE DISCLOSURE; information transfers; Analyst forecasts; RETURN VOLATILITY; Herd behavior; stock-prices; FIRMS; investors

摘要

We document peer effect as an important factor in determining corporate voluntary disclosure policies. Our identification strategy relies on a discontinuity in the distribution of institutional ownership caused by the annual Russell 1000/2000 index reconstitution. Around the threshold of the Russell 1000/2000 index, the top Russell 2000 index firms experience a significant jump in institutional ownership compared with their closely neighbored bottom Russell 1000 index firms due to index funds' benchmarking strategies. The increase in institutional ownership and resultant improvement in the information environment of the top Russell 2000 index firms create pressures on their industry peers to increase voluntary disclosures. Consistent with this prediction, we find that the discontinuously higher institutional ownership of the top Russell 2000 index firms significantly increases industry peers' likelihood and frequency of issuing management forecasts. Further analyses show that such an effect could be driven by firms' incentive to compete for capital.