Managers' Voluntary Disclosure Decisions and Business Press Attention
58 Pages Posted: 13 Dec 2019 Last revised: 13 Aug 2023
Date Written: August 11, 2023
Abstract
I investigate the relation between business press attention and the incidence and properties of managers' voluntary disclosures. Specifically, I examine managers' disclosure responses to a bad news event: material lawsuits against the firm. I posit that managers' disclosure decisions are affected by press attention of this event, since press attention draws additional stakeholders' attention and increases information demand. Examining managers' voluntary Form 8-K Item 8.01 filings, I find that both anticipated and actual press coverage of the lawsuit event are positively associated with the likelihood and timeliness of these filings. Moreover, I find that press attention is associated with several textual characteristics of the filings, including length, tone, and complexity. This study extends a growing literature on the monitoring role of the press and suggests that managers' disclosures of bad news respond to anticipated and actual press scrutiny.
Keywords: Business press, Form 8-K, Litigation, Voluntary disclosure
JEL Classification: D83, G14, K22, L82, M41, M48
Suggested Citation: Suggested Citation