The role of equity underwriters in shaping corporate disclosure

Mei Cheng (), Yuan Zhang () and Meiling Zhao ()
Additional contact information
Mei Cheng: The University of Arizona
Yuan Zhang: The University of Texas at Dallas
Meiling Zhao: The Chinese University of Hong Kong

Review of Accounting Studies, 2025, vol. 30, issue 1, No 7, 247-286

Abstract: Abstract We find that the exogenous shock of the collapse of Lehman Brothers leads to significant increases in the disclosure of management earnings forecasts and voluntary 8-K items by equity underwriting clients of Lehman relative to clients of other underwriters of similar status. The increases in disclosure are more pronounced among Lehman clients with stronger underwriting relationships with Lehman or those that experienced more negative stock returns at the time of the collapse. Additional analyses reveal that, while Lehman clients experienced reductions in liquidity compared to non-Lehman clients after the collapse, this reduction is significantly attenuated among Lehman clients that increased the volume of their voluntary disclosures. Finally, we expand the sample to a larger set of underwriters and document that equity underwriter reputation changes are negatively associated with subsequent client disclosures, consistent with a substitution effect between client firms’ voluntary disclosures and the information roles played by high-quality underwriters. Overall, our results underscore the importance of the informational role of firms’ equity underwriters beyond the initial public offering (IPO) period.

Keywords: Corporate disclosure; Equity underwriter; Liquidity; Lehman Brothers (search for similar items in EconPapers)
JEL-codes: D82 G2 M41 (search for similar items in EconPapers)
Date: 2025
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11142-023-09817-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:reaccs:v:30:y:2025:i:1:d:10.1007_s11142-023-09817-1

Ordering information: This journal article can be ordered from
http://www.springer.com/accounting/journal/11142

DOI: 10.1007/s11142-023-09817-1

Access Statistics for this article

Review of Accounting Studies is currently edited by Paul Fischer

More articles in Review of Accounting Studies from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().