IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this article

Market adaptation to Regulation Fair Disclosure: The use of industry information to enhance the informational environment

Listed author(s):
  • Yu, Susana
  • Webb, Gwendolyn
Registered author(s):

    Our fundamental research interest is in exploring the ways in which the financial markets have adapted to Reg FD, and our particular focus is on how market participants use industry information embedded in firms’ earnings announcements. We find that announcements of quarterly earnings made by companies that are the first in their industry to report in a given quarter have significant effects on the stock returns of other firms in the same industry as well as on their own stock returns. We then test the implications of these findings for their effects on the information environment. Overall, our empirical findings support the conclusion that the implementation of Reg FD has led to increased use of industry information that is revealed in earnings announcements. This is one way, among others, in which analysts and other market participants have adapted to the requirements of Reg FD. In this case, they have made the adaptation by developing new uses of public information to enhance the informational environment.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/pii/S0148619516300625
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal Journal of Economics and Business.

    Volume (Year): 89 (2017)
    Issue (Month): C ()
    Pages: 1-12

    as
    in new window

    Handle: RePEc:eee:jebusi:v:89:y:2017:i:c:p:1-12
    DOI: 10.1016/j.jeconbus.2016.10.002
    Contact details of provider: Web page: http://www.elsevier.com/locate/jeconbus

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as
    in new window


    1. Anup Agrawal & Sahiba Chadha & Mark A. Chen, 2006. "Who Is Afraid of Reg FD? The Behavior and Performance of Sell-Side Analysts Following the SEC's Fair Disclosure Rules," The Journal of Business, University of Chicago Press, vol. 79(6), pages 2811-2834, November.
    2. Aigbe Akhigbe & Jeff Madura & Melinda Newman, 2006. "Industry Effects Of Analyst Stock Revisions," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 29(2), pages 181-198.
    3. Roger K. Loh & René M. Stulz, 2011. "When Are Analyst Recommendation Changes Influential?," Review of Financial Studies, Society for Financial Studies, vol. 24(2), pages 593-627.
    4. Green, T. Clifton & Jame, Russell & Markov, Stanimir & Subasi, Musa, 2014. "Access to management and the informativeness of analyst research," Journal of Financial Economics, Elsevier, vol. 114(2), pages 239-255.
    5. Baljit Sidhu & Tom Smith & Robert E. Whaley & Richard H. Willis, 2008. "Regulation Fair Disclosure and the Cost of Adverse Selection," Journal of Accounting Research, Wiley Blackwell, vol. 46(3), pages 697-728, 06.
    6. Dave Jackson & Jeff Madura, 2007. "Impact of regulation fair disclosure on the information flow associated with profit warnings," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 31(1), pages 59-74, March.
    7. Jorion, Philippe & Zhang, Gaiyan, 2007. "Good and bad credit contagion: Evidence from credit default swaps," Journal of Financial Economics, Elsevier, vol. 84(3), pages 860-883, June.
    8. Li, Yutao & Saunders, Anthony & Shao, Pei, 2015. "Did Regulation Fair Disclosure affect credit markets?," Journal of Banking & Finance, Elsevier, vol. 54(C), pages 46-59.
    9. Anna Agapova & Jeff Madura & Zhanel Mailibayeva, 2012. "Does Regulation Fair Disclosure Reduce the Information Quality of Managerial Guidance?," The Financial Review, Eastern Finance Association, vol. 47(2), pages 273-297, 05.
    10. Mensah, Yaw M. & Yang, Rong, 2008. "An empirical evaluation of analysts' herding behavior following Regulation Fair Disclosure," Journal of Accounting and Public Policy, Elsevier, vol. 27(4), pages 317-338.
    11. Kross, William J. & Suk, Inho, 2012. "Does Regulation FD work? Evidence from analysts' reliance on public disclosure," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 225-248.
    12. Marcel Prokopczuk, 2010. "Intra-industry contagion effects of earnings surprises in the banking sector," Applied Financial Economics, Taylor & Francis Journals, vol. 20(20), pages 1601-1613.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:jebusi:v:89:y:2017:i:c:p:1-12. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.