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http://ssrn.com/abstract=1808123
 
 

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Leveling the Playing Field: Disclosure Regulation and Local Informational Advantage


Gennaro Bernile


Singapore Management University - Lee Kong Chian School of Business

Alok Kumar


University of Miami - School of Business Administration

Johan Sulaeman


National University of Singapore (NUS) - Department of Finance; Southern Methodist University (SMU) - Edwin L. Cox School of Business

March 16, 2015


Abstract:     
This study examines how changes in firms' information environment affect local agents. We show that local bias and informational advantage of institutional investors and equity analysts located around corporate headquarters decline sharply following the adoption of Regulation Fair Disclosure and Sarbanes-Oxley Act. The decline in local bias is more salient among firms whose information environment is more opaque before the new rules. At the aggregate market level, the degree of informed trading attributed to local investors also declines. Overall, the evidence is consistent with disclosure regulation affecting the informational advantage that market participants enjoy due to their proximity to firms.

Number of Pages in PDF File: 50

Keywords: Disclosure Regulation; Reg FD; Sarbanes-Oxley; Local Bias; Local Performance; Institutional Investors; Equity Analysts


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Date posted: April 13, 2011 ; Last revised: March 16, 2015

Suggested Citation

Bernile, Gennaro and Kumar, Alok and Sulaeman, Johan, Leveling the Playing Field: Disclosure Regulation and Local Informational Advantage (March 16, 2015). Available at SSRN: http://ssrn.com/abstract=1808123 or http://dx.doi.org/10.2139/ssrn.1808123

Contact Information

Gennaro Bernile
Singapore Management University - Lee Kong Chian School of Business ( email )
50 Stamford Road
Level 4
Singapore, 178899
Singapore
+65-68085478 (Phone)

Alok Kumar (Contact Author)
University of Miami - School of Business Administration ( email )
514 Jenkins Building
Department of Finance
Coral Gables, FL 33124-6552
United States
305-284-1882 (Phone)
HOME PAGE: http://moya.bus.miami.edu/~akumar
Johan Sulaeman
National University of Singapore (NUS) - Department of Finance ( email )
Mochtar Riady Building
15 Kent Ridge Drive
Singapore, 119245
Singapore
HOME PAGE: http://sites.google.com/site/johansulaeman/
Southern Methodist University (SMU) - Edwin L. Cox School of Business ( email )
Dallas, TX 75225
United States
214-768-8284 (Phone)
HOME PAGE: http://jsulaeman.cox.smu.edu
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