Regulation Fair Disclosure, Analyst Following and Analyst Forecast Dispersion

Posted: 31 Oct 2002

See all articles by Afshad J. Irani

Afshad J. Irani

Washington and Lee University

Irene Karamanou

University of Cyprus - Department of Public and Business Administration

Abstract

This paper presents preliminary evidence of the effect of Regulation Fair Disclosure (FD) on the quantity and quality of firm-specific information released to the market by comparing analyst forecast data from pre-FD to post-FD time periods. By prohibiting selective disclosure of material information to privileged individuals, the Securities and Exchange Commission intends to provide a level playing field to all investors. However, opponents argue that FD has a negative impact by decreasing the quantity and quality of publicly available information. Consistent with this argument, we document a decrease in analyst following and an increase in forecast dispersion following the passage of FD.

Keywords: regulation FD, analyst following, analyst forecast dispersion

JEL Classification: G1, G29, G38, M41

Suggested Citation

Irani, Afshad Jeevan and Karamanou, Irene, Regulation Fair Disclosure, Analyst Following and Analyst Forecast Dispersion. Accounting Horizons, Forthcoming. Available at SSRN: https://ssrn.com/abstract=335880

Afshad Jeevan Irani (Contact Author)

Washington and Lee University ( email )

204 West Washington Street
Lexington, VA 24450
United States
5404588628 (Phone)

Irene Karamanou

University of Cyprus - Department of Public and Business Administration ( email )

75 Kallipoleos Street
P.O. Box 20537
Nicosia CY-1678
CYPRUS
+357 2 892471 (Phone)
+357 2 892460 (Fax)

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