Measuring Disclosure Using 8K Filings
75 Pages Posted: 8 Aug 2015 Last revised: 15 Feb 2018
Date Written: February 2018
We construct and validate four comprehensive firm-specific voluntary disclosure measures using information reported via 8-Ks. One is the count of 8-Ks, and the other three are based on information drawn from voluntary 8-K-item numbers (2.02, 7.01, and 8.01). The second and third measures are based on the count and the word count of the items and exhibits within the voluntary 8-K items. The final measure is the number of times a firm reports the disclosure of management guidance, conference calls, non-GAAP measures, and investor days within the voluntary 8-K items. We validate our measures by examining (1) theoretical associations between them and two proxies for information asymmetry and the cost of equity and (2) the determinants. We also calculate two measures of concurrent firm-specific mandatory disclosure to act as controls. Overall, we present evidence that our new measures behave consistent with the underlying construct, based on our validation tests.
Keywords: voluntary disclosure; mandatory disclosure, 8-K filings
JEL Classification: M41; D83
Suggested Citation: Suggested Citation