Does Modern Information Technology Attenuate Managerial Information Hoarding? Evidence from EDGAR Implementation

47 Pages Posted: 22 Feb 2021 Last revised: 25 Feb 2021

See all articles by Xiaoran Ni

Xiaoran Ni

Xiamen University - Wang Yanan Institute for Studies in Economics (WISE); Xiamen University - School of Economics

Ye (Emma) Wang

Stevens Institute of Technology

David Yin

Miami University of Ohio

Date Written: February 20, 2021

Abstract

Exploiting the staggered implementation of the EDGAR system from 1993 to 1996 as quasi-exogenous shocks, we find that the internet dissemination of corporate disclosures encourages managers’ bad news hoarding and thus increases firms’ future stock price crash risk. Supplemental evidence suggests that short-term pressures due to increased stock liquidity and investors’ increased reliance on accounting numbers appear to play a role, and both accrual and real earnings management increase. Taken together, our findings indicate that while modern information technologies increase market efficiency by lowering information acquisition costs, they may have an unintended effect on managers’ incentives to hoard bad news.

Keywords: Modern Information Technology, EDGAR, Information Hoarding, Stock Price Crash Risk, Stock Liquidity

JEL Classification: G12, G14, M41, D83, O33

Suggested Citation

Ni, Xiaoran and Wang, Ye and Yin, David, Does Modern Information Technology Attenuate Managerial Information Hoarding? Evidence from EDGAR Implementation (February 20, 2021). Available at SSRN: https://ssrn.com/abstract=3747429 or http://dx.doi.org/10.2139/ssrn.3747429

Xiaoran Ni

Xiamen University - Wang Yanan Institute for Studies in Economics (WISE) ( email )

D 204, Economics Building
Xiamen, Fujian 361005
China

Xiamen University - School of Economics ( email )

China

Ye Wang

Stevens Institute of Technology ( email )

Hoboken, NJ 07030
United States

David Yin (Contact Author)

Miami University of Ohio ( email )

Oxford, OH 45056
United States

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