Selective disclosure and the role of Form 8‐K in the post‐Reg FD era

Gleason, Cristi A.; Ling, Zhejia; Rong, Zhao

doi:10.1111/jbfa.12416

Cited by 11 publications

(9 citation statements)

References 52 publications

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“…that quarter, while 8-Ks measures the number of 8-Ks. We measure all 8-Ks because the degree of management discretion differs across item types (Lerman and Livnat 2010;Gleason, Ling, and Zhao 2018), and we assume that any variation in total 8-Ks related to attention comes from voluntary instead of mandatory disclosures (similar to Bird and Karolyi 2016). 7 When firms have multiple forecasts or 8-Ks on the same day, we count them separately (i.e., an earnings and cash flow forecast issued on the same day are counted as two forecasts).…”

Section: Methodsmentioning

confidence: 99%

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Institutional Investor Attention and Firm Disclosure

Abramova

Core

Sutherland

2020

The Accounting Review

118

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We study how short-term changes in institutional owner attention affect managers' disclosure choices. Holding institutional ownership constant and controlling for industry-quarter effects, we find that managers respond to attention by increasing the number of forecasts and 8-K filings. Rather than alter the decision of whether to forecast or to provide more informative disclosures, attention causes minor disclosure adjustments. This variation in disclosure is primarily driven by passive investors. Although attention explains significant variation in the quantity of disclosure, we find little change in abnormal volume and volatility, the bid-ask spread, or depth. Overall, our evidence suggests that management responds to temporary institutional investor attention by making disclosures that have little effect on information quality or liquidity.

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Section: Methodsmentioning

confidence: 99%

“…For example, managers are required to file 8-Ks for certain events (e.g., dividend decreases), but have discretion for others(Gleason et al 2018). Managers can also reduce forecasting activity.Electronic copy available at: https://ssrn.com/abstract=3066136…”

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confidence: 99%

Institutional Investor Attention and Firm Disclosure

Abramova

Core

Sutherland

2020

The Accounting Review

118

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“…However, from the perspective of agency cost, firms may be strategic in environmental information disclosure to avoid or minimize negative reactions from investors (Gleason et al, 2020). According to the selective disclosure, enterprises with better environmental performance are more willing to disclose highquality environmental information; however, enterprises with poor environmental performance choose to disclose more soft information on environmental performance.…”

Section: Eid and Stock Price Crashmentioning

confidence: 99%

The Pitfall of Selective Environmental Information Disclosure on Stock Price Crash Risk: Evidence From Polluting Listed Companies in China

Yang

2021

Front. Environ. Sci.

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Due to incomplete legal regulation, enterprises have the motive of selective environmental information disclosure (EID), and such selective disclosure strategy may result in stock price crash risk. In this study, the EID scores of China’s 1,010 polluting listed companies between 2007 and 2017 are first measured by employing the text analysis approach. Subsequently, we empirically examine the impacts of corporate’s selective EID on the stock price crash risk. The results indicate that EID of China’s polluting listed companies has significantly increased their stock price crash risk, rather than reducing it. Specifically, the EID of polluting companies with lower information efficiency, higher inefficient investment, higher degree of government control, and location in lower marketization areas is more likely to increase their stock price crash risk. Additional analyses reveal that the EID of polluting listed companies in China cannot reduce their stock price synchronization, which means that the selective disclosure of environmental information of China’s polluting listed companies is useless, and thus cannot reduce the risk of stock price crash.

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“…The Securities Exchange Commission (SEC) views the flow of information from firms and investors as crucial to achieving its objectives of protecting investors and ensuring the smooth functioning of capital markets. The SEC's rules on corporate disclosure specify language, content, timing and audience for corporate disclosure to “ensure that investors have access to high‐quality disclosure materials that facilitate informed investment decision‐making.”, Despite the regulations regarding disclosure, managers have considerable leeway over disclosure choices (Beyer et al., 2010; Gleason et al., 2020; Graham et al., 2005; Healy & Palepu, 2001, etc. ), especially when it comes to qualitative aspects of the disclosures such as their tone (Arslan‐Ayaydin et al., 2016; Henry, 2008).…”

Section: Introductionmentioning

confidence: 99%

Institutional ownership and the informativeness of disclosure tone

Jain

Manchiraju

Sunder

2022

Business Fin & Account

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Disclosure tone is an important qualitative characteristic of managerial disclosures. There is mixed evidence on the role of tone in disclosure strategy. While some studies highlight the informativeness of disclosure tone, other studies provide evidence consistent with an information obfuscation role. We conjecture that the mixed evidence may be because prior studies have not explicitly modeled the role of oversight over managerial disclosure. Using an exogenous shock to institutional ownership, an important source of managerial oversight, we find that abnormal disclosure tone is informative of a firm's future earnings and cash flows when institutional ownership is high. This positive association between institutional ownership and informativeness of abnormal tone is stronger when there is an increase in quasi‐indexer institutional ownership and the contemporaneous performance is negative. Collectively, the results highlight a more complex role for disclosure tone. Abnormal disclosure tone could be reflective of managerial sentiment and convey forward‐looking information to investors in the presence of greater oversight over managerial actions.

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Selective disclosure and the role of Form 8‐K in the post‐Reg FD era

Cited by 11 publications

References 52 publications

Institutional Investor Attention and Firm Disclosure

Institutional Investor Attention and Firm Disclosure

The Pitfall of Selective Environmental Information Disclosure on Stock Price Crash Risk: Evidence From Polluting Listed Companies in China

Institutional ownership and the informativeness of disclosure tone

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