Information Overload? An Empirical Analysis of the Increasing SEC Filing Volumes and the Information Environment

Abstract

The volume of firms’ SEC filings has increased considerably in the last two decades. We document significant implications of this increase for the corporate information environment. Using a 2004 SEC regulation on 8-K filings as a shock to SEC filing volume, we show that 8-K filing volume increases analyst forecast dispersion after the regulation. In particular, 8-K filings newly required by the regulation increase both absolute analyst forecast error and analyst forecast dispersion. Further analyses uncover a nonlinear relation between 8-K filing volume and analyst forecast dispersion. We find similar results when we examine all SEC filings or use alternative measures of the information environment. Our results suggest an important cost associated with the increasing SEC filing requirements, shedding light on the information overload effect that the SEC itself has been concerned about and has recently attempted to address.

Keywords: Form 8-K, SEC filing, analyst forecast, information environment, information overload