The Effect of Modern Information Technologies on Firm Valuation

Jieyujin Chen (), Zhi Li (), Jing Xie () and Tingting Zhang ()
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Jieyujin Chen: Department of Finance and Business Economics, University of Macau, Macau, China
Zhi Li: School of Accounting, Southwestern University of Finance and Economics,555, Chengdu, Sichuan, P. R. China, 611130
Jing Xie: Department of Finance and Business Economics, University of Macau, E22-4064, Taipa, Macau, China
Tingting Zhang: Department of Finance and Business Economics, University of Macau, Macau, China

No 202643, Working Papers from University of Macau, Faculty of Business Administration

Abstract: We find that firm value increases following the mandatory adoption of the SEC’s EDGAR system. Parallel trends analysis indicates that this effect is absent prior to EDGAR implementation. The impact is stronger for firms with higher institutional ownership and greater analyst coverage, suggesting that EDGAR’s governance role complements existing external monitoring mechanisms. The effect is also more pronounced among firms with a greater demand for external monitoring, such as those prone to overinvestment and those with higher geographic dispersion. Leveraging the SEC’s 1994 regulatory refinement, which split EDGAR adoption into two phases, we isolate the effects of information production and information dissemination. We find that the positive impact on firm valuation is driven entirely by late-phase adopters, which provide investors with timely access to firm disclosures, whereas no such effect is observed for early-phase adopters that produce information without ensuring prompt dissemination. This contrast underscores the importance of timely information dissemination in enhancing the effectiveness of modern technologies. Overall, our results suggest that well-designed information technologies strengthen external oversight and, in turn, increase firm valuation.

Keywords: Information disclosure; Firm valuation; Corporate Governance (search for similar items in EconPapers)
Pages: 62 pages
Date: 2026-07
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Published in UM-FBA Working Paper Series

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