Campus Units

Finance

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

10-2020

Journal or Book Title

Journal of Corporate Finance

Volume

64

First Page

101669

DOI

10.1016/j.jcorpfin.2020.101669

Abstract

We investigate regulations intended to stop managers from privately disclosing corporate information to analysts in a setting with enhanced potential to isolate regulatory effects: the European Union (EU) Market Abuse Directive (MAD), a common regulation implemented by member states with varying sanctions and enforcement resources. Following the implementation of MAD in a country, analyst forecasts become more accurate, with relatively little of the effect attributable to increased voluntary public disclosure by covered firms. The effect of MAD on analyst accuracy is stronger in countries with more stringent enforcement and sanction systems. Although the improvement in accuracy is associated with the implementation of MAD alone, stock prices do not respond more strongly to analyst forecast releases until after market-trading enforcement improves under subsequent EU legislation (MiFID).

Comments

This accepted article is published as Cowan, A.R., Salotti, V., Anti-Selective Disclosure Regulation and Analyst Forecast Accuracy and Usefulness. Journal of Corporate Finance, 64 (2020), doi: 10.1016/j.jcorpfin.2020.101669. Posted with permission.

Copyright Owner

Elsevier B.V.

Language

en

File Format

application/pdf

Available for download on Friday, June 10, 2022

Published Version

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