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http://ssrn.com/abstract=2163572
 
 

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Regulation FD: A Review and Synthesis of the Academic Literature


Adam S. Koch


University of Virginia - McIntire School of Commerce

Craig E. Lefanowicz


University of Virginia - McIntire School of Commerce

John R. Robinson


University of Texas at Austin

March 13, 2013

Accounting Horizons, Forthcoming

Abstract:     
We summarize the empirical evidence regarding Regulation Fair Disclosure (FD) to gauge whether the regulation achieves its stated objectives and to provide insights and direction for future research. Overall, we find that FD’s prohibition against the selective disclosure of material information eliminates the information advantage enjoyed by certain investors and analysts and thereby provides a more level playing field for all investors. In addition, a number of firms respond to FD by expanding public disclosures and the information environment of the average firm does not appear to be adversely affected. However, we find that an unintended consequence of FD is a reduction in the total amount of information available in the market (i.e., a “chilling effect”) for small or high-technology firms. Finally, ongoing research suggests that private access to management continues to provide select analysts or investors with non-material information used to complete the “mosaic” of information.

Number of Pages in PDF File: 49

Keywords: Regulation Fair Disclosure (Reg FD), Financial Analysts, Earnings Guidance, Capital Markets

JEL Classification: G14, G18, M41

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Date posted: October 19, 2012 ; Last revised: June 13, 2013

Suggested Citation

Koch, Adam S. and Lefanowicz, Craig E. and Robinson, John R., Regulation FD: A Review and Synthesis of the Academic Literature (March 13, 2013). Accounting Horizons, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2163572 or http://dx.doi.org/10.2139/ssrn.2163572

Contact Information

Adam S. Koch (Contact Author)
University of Virginia (UVA) - McIntire School of Commerce ( email )
P.O. Box 400173
Charlottesville, VA 22904-4173
United States
Craig E. Lefanowicz
University of Virginia (UVA) - McIntire School of Commerce ( email )
P.O. Box 400173
Charlottesville, VA 22904-4173
United States
434-924-6356 (Phone)
John R. Robinson
University of Texas at Austin ( email )
Austin, TX 78712
United States
512-471-5315 (Phone)
512-471-3904 (Fax)
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