2023
DOI: 10.1016/j.jacceco.2022.101528
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Mandatory disclosure and learning from external market participants: Evidence from the JOBS act

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Cited by 16 publications
(3 citation statements)
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“…Markets have competitive advantages in generating certain types of information compared with companies, hence the production of private information remains crucial (Hayek, 2000). Whilst mandatory disclosure increases overall market information, it makes investors less willing to seek and produce information, generally reducing the amount of information available for managers to make decisions (Pinto, 2023). For growth-focused companies, where future investments are vital and the stock price feedback effect is significant, the increased cost of private information can lead to a loss of value by suppressing stock price feedback (Gao & Liang, 2013).…”
Section: Multiple Costmentioning
confidence: 99%
“…Markets have competitive advantages in generating certain types of information compared with companies, hence the production of private information remains crucial (Hayek, 2000). Whilst mandatory disclosure increases overall market information, it makes investors less willing to seek and produce information, generally reducing the amount of information available for managers to make decisions (Pinto, 2023). For growth-focused companies, where future investments are vital and the stock price feedback effect is significant, the increased cost of private information can lead to a loss of value by suppressing stock price feedback (Gao & Liang, 2013).…”
Section: Multiple Costmentioning
confidence: 99%
“…Investors actively acquire and trade on information about CEO performance and the quality of CEO-firm 8 As discussed in Goldstein (2022), one challenge in this line of research is that it is hard to construct empirical measures that truly capture price informativeness. To address this issue, several prior studies rely on market characteristics and exogenous shocks that likely alter price informativeness and examine managerial learning from prices (e.g., Foucault and Fresard 2012;Edmans et al 2017;Ye et al 2022;Pinto 2022). We build on these studies by also identifying a setting (the TSP Program) that reduced the amount of acquirable investor information in prices.…”
Section: Hypothesis Developmentmentioning
confidence: 99%
“…Studies provide growing evidence in support of this informational feedback from the market, yet they 4 An extensive body of literature also examines the relative importance of stock prices and earnings as performance measures for CEO compensation (Holmström 1979;Lambert and Larcker 1987;Baber, Kang, and Kumar 1998;Core, Guay, and Verrecchia 2003;Jayaraman and Milbourn 2012;Li and Wang 2016;Bettis, Bizjak, Coles, and Kalpathy 2018;Jayaraman, Ling, Wu, and Zhang 2021). mostly focus on corporate managers making corporate investment decisions (e.g., Luo 2005;Chen et al 2007;Edmans et al 2017;Jayaraman and Wu 2020;Pinto 2022;Ye et al 2022) and revising earnings forecasts (Zuo 2016). We extend this strand of research by exploring corporate directors as decision-makers who glean investor information from stock prices when making CEO turnover decisions.…”
Section: Introductionmentioning
confidence: 99%