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The value of equal access to mandatory disclosure: evidence from the Great Postal Strike of 1970

Author

Listed:
  • Bin Li

    (Vanderbilt University)

  • Mohan Venkatachalam

    (Duke University)

Abstract

How important is equal access to mandatory disclosures? We exploit the postal strike of 1970 that caused a delay in the delivery of annual reports via mail. This strike created unequal access because certain investors (e.g., institutions) had both the incentives and ability to obtain the annual reports by other means. Theory predicts that, when differential access exists, adverse selection problems intensify, causing a decline in stock trading. Our findings support this prediction: stock trading volume decreased by approximately 28% for firms unable to deliver the annual reports to shareholders during the strike, and this trading decline gradually dissipated afterward. Further tests confirm adverse selection as the primary mechanism. Overall, our paper underscores the importance of equal access to annual reports—a key mandated disclosure—and demonstrates the value of these reports to shareholders, as evidenced by their reluctance to trade absent this information.

Suggested Citation

  • Bin Li & Mohan Venkatachalam, 2025. "The value of equal access to mandatory disclosure: evidence from the Great Postal Strike of 1970," Review of Accounting Studies, Springer, vol. 30(2), pages 1397-1431, June.
    • Handle: RePEc:spr:reaccs:v:30:y:2025:i:2:d:10.1007_s11142-024-09864-2
    DOI: 10.1007/s11142-024-09864-2
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    More about this item

    Keywords

    Annual report; Equal access; Trading volume; Adverse selection;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • N22 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: 1913-

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