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

44 Pages Posted: 22 Feb 2021 Last revised: 27 Sep 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: September 14, 2021

Abstract

Exploiting the staggered implementation of the EDGAR system from 1993 to 1996 as exogenous shocks to information dissemination technologies, we document that faster dissemination of corporate disclosures through the internet increases firms’ future stock price crash risk. These results are robust to alternative sample constructions, measures of crash risk, and fixed effects. Supplemental evidence suggests two channels: an increase in stock liquidity and an increase in investors’ reliance on public disclosure, both of which exacerbate managers’ incentives to withhold bad news. Overall, our findings suggest that modern information technology may have an unintended effect on managers’ bad news hoarding behavior.

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 (September 14, 2021). Journal of Corporate Finance, Forthcoming, 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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