Increased mandated disclosure frequency and price formation: evidence from the 8-K expansion regulation

Jeff L. McMullin, Brian P. Miller () and Brady J. Twedt
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Jeff L. McMullin: Indiana University
Brian P. Miller: Indiana University
Brady J. Twedt: University of Oregon

Review of Accounting Studies, 2019, vol. 24, issue 1, No 1, 33 pages

Abstract: Abstract Regulators claim that increased mandated disclosure frequency should lead to more efficient price formation. However, analytical models suggest that mandating disclosure may actually impede the price formation process, and prior empirical studies have been unable to document a relation between mandatory disclosure and improved price formation. We re-examine this relationship using a recent SEC regulation that increased the frequency of mandated event disclosures in form 8-K. We show that price formation improves after the mandate, where firms with the largest increases in mandatory disclosure experience the greatest improvements in price formation. Our evidence is consistent with the idea that mandating an increase in the frequency that material events must be disclosed is associated with improved price formation.

Keywords: Regulation; Mandatory disclosure; 8-K filings; Price formation (search for similar items in EconPapers)
JEL-codes: D82 G38 L51 M41 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (14)

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DOI: 10.1007/s11142-018-9462-2

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