Individual Investors and Financial Disclosure

Posted: 16 Jul 2013

Date Written: June 15, 2013


Using detailed data of individual investors, this study shows that, on average, individuals invest more in firms with clear and concise financial disclosures. The results indicate this relation is less pronounced for high frequency trading and financially-literate individuals. The study also shows that individuals’ returns are increasing with clearer and more concise disclosures, implying such disclosures reduce individuals’ relative information disadvantage. Together, the findings suggest improved corporate disclosure practices benefit individual investors, in particular buy-and-hold investors.

Keywords: Individual investors, financial disclosure, individual characteristics, information disadvantage

JEL Classification: D10, G11, M41, M45

Suggested Citation

Lawrence, Alastair, Individual Investors and Financial Disclosure (June 15, 2013). Journal of Accounting & Economics (JAE), Vol. 56, No. 1, 2013, Available at SSRN:

Alastair Lawrence (Contact Author)

London Business School ( email )

Regent's Park
United Kingdom


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