The Information Content of Corporate Earnings: Evidence from the Securities Exchange Act of 1934

Oliver Binz and John Graham

No 29747, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine whether the Securities Exchange Act of 1934 increased the information content of corporate earnings disclosures. Prior research questions whether the Act improved disclosure quality but generally relies on long-window tests and yields mixed results. We focus on whether the Act increased earnings informativeness, improving upon prior designs by focusing on short earnings announcement windows and employing a difference-in-differences design to control for potential contemporaneous structural changes. We document an increase in earnings informativeness following the Act, which is larger for treatment firms (which withheld disclosure before the Act) than for control firms. The increase in informativeness is more pronounced for firms that are subject to stronger enforcement.

JEL-codes: B26 G14 G18 K22 M41 M48 (search for similar items in EconPapers)
Date: 2022-02
New Economics Papers: this item is included in nep-acc, nep-ban and nep-cfn
Note: AP CF PE POL
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Published as OLIVER BINZ & JOHN R. GRAHAM, 2022. "The Information Content of Corporate Earnings: Evidence from the Securities Exchange Act of 1934," Journal of Accounting Research, vol 60(4), pages 1379-1418.

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