How Does Regulation Fair Disclosure Affect Pre-fair Disclosure Selective Disclosers?

摘要

This paper investigates the impact of Regulation Fair Disclosure (hereafter Reg FD) by examining its influence on firms that relied on selective disclosures in the pre-FD period. I construct a proxy for the extent of a firm's reliance on selective disclosures and identify public disclosers and selective disclosers prior to Reg FD. Because Reg FD affects selective disclosers, whereas confounding events around the passage of Reg FD affect all firms, I compare changes in information metrics around Reg FD between these two groups of firms. The differences in their changes indicate Reg FD's effects. I find that Reg FD is associated with reductions in the number of analysts following a firm and the informational efficiency of stock prices prior to earnings announcements, and with increases in analysts' forecast error, their forecast dispersion, and the abnormal trading volume at earnings announcements for pre-FD selective disclosers. This study helps us better understand and evaluate the impact of Reg FD.