This study investigates the effect of Regulation FD on market reactions for both closed-call (CLC) firms and open-call (OPC) firms as compared to non-conference-call (NCC) firms in both pre- and post-FD periods. Given conference calls increase the information gap between analysts privy to the call and the remainder of investors before Reg. FD took effect (Bowen, Davis and Matsumoto 2002), this study further analyzes market reactions between previous OPC firms and CLC firms after the release of Reg. FD. It provides evidence that market reactions around earnings announcement dates in three different windows, (-1, +1), (-2, +4) and (-5, +10), are significantly different between OPC firms and CLC firms prior to the release of Reg. FD. These differences disappear after the implementation of Reg. FD. Overall, these findings imply that, to some extent, Reg. FD did “level the playing field” for financial analysts and investors, consistent with Reg. FD’s success in eliminating selective disclosure.
|Presenter:||Rong Yang (Faculty)|
|Time:||9:40 am (Session I)|