Information Overload and Disclosure Smoothing

Review of Accounting Studies

56 Pages Posted: 13 Jul 2017 Last revised: 14 Jun 2019

See all articles by Kimball Chapman

Kimball Chapman

Washington University in St. Louis - John M. Olin Business School

Nayana Reiter

University of Toronto - Rotman School of Management

Hal D. White

University of Notre Dame

Christopher D. Williams

University of Michigan, Stephen M. Ross School of Business

Date Written: May 31, 2019

Abstract

This paper examines whether managers can reduce the detrimental effects of information overload by spreading out, or temporally smoothing, disclosures. We begin by attempting to identify managerial smoothing. We find that when there are multiple disclosures for the same event date, managers spread the disclosures out over several days. Managers are also more likely to delay a disclosure when there has been a disclosure made within the three days before the event date. Finally, managers are more likely to engage in disclosure smoothing when disclosures are longer, the information environment is more robust, firm information is complex, uncertainty is high, and disclosure news is more positive. Our second set of analyses examines whether there are market benefits to disclosure smoothing. Using two different measures of disclosure smoothing, we find that smoothing is associated with increased liquidity, reduced stock price volatility and increased analyst forecast accuracy.

Suggested Citation

Chapman, Kimball and Reiter, Nayana and White, Hal D. and Williams, Christopher D., Information Overload and Disclosure Smoothing (May 31, 2019). Review of Accounting Studies, Available at SSRN: https://ssrn.com/abstract=3001322

Kimball Chapman

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

Nayana Reiter (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Hal D. White

University of Notre Dame ( email )

389C Mendoza College of Business
University of Notre Dame
Notre Dame, IN 46556
United States
574-361-3809 (Phone)

Christopher D. Williams

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
(734)647-2842 (Phone)

Do you want regular updates from SSRN on Twitter?

Paper statistics

Downloads
149
Abstract Views
1,050
rank
266,044
PlumX Metrics