Re-examining the Effects of Regulation Fair Disclosure Using Foreign Listed Firms to Control for Concurrent Shocks

Posted: 8 Sep 2006  

Jennifer Francis

Duke University

Dhananjay Nanda

University of Miami - School of Business Administration

Xin Wang

The University of Hong Kong

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Abstract

We re-examine the effects of regulation fair disclosure (Reg FD) using ADRs (who are exempt from Reg FD) to control for confounding events which affected all traded firms. Tests based on public information metrics (returns volatility, informational efficiency and trading volume) and on analyst information metrics (forecast dispersion and accuracy) suggest that Reg FD did not uniquely affect the US information environment. However, analyst report informativeness declined for US firms relative to ADR firms, providing evidence consistent with Reg FD achieving one of its objectives - reducing private information flows to analysts.

Keywords: Reg FD, foreign-listed firms. information environment

JEL Classification: M41, M45, M47, G38

Suggested Citation

Francis, Jennifer and Nanda, Dhananjay and Wang, Xin, Re-examining the Effects of Regulation Fair Disclosure Using Foreign Listed Firms to Control for Concurrent Shocks. Journal of Accounting and Economics, Vol. 41, pp. 271-292, September 2006. Available at SSRN: https://ssrn.com/abstract=929051

Jennifer Francis (Contact Author)

Duke University ( email )

Fuqua School of Business
Durham, NC 27708
United States
919-660-7817 (Phone)
919-648-2818 (Fax)

Dhananjay Nanda

University of Miami - School of Business Administration ( email )

P.O. Box 248126
Florida
Coral Gables, FL 33124
United States
3052843122 (Phone)

Xin Wang

The University of Hong Kong ( email )

1216 K.K.Leung Building
Hong Kong
Hong Kong

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