The Effectiveness of Regulation Fd
Publication Date
1-5-2005
Abstract
We examine whether Regulation FD has reduced the informativeness of analysts' information outputs. For a sample of financial analysts' earnings forecasts and recommendations released in a two-year window around Regulation FD's effective date, we show that in the post-Regulation FD period the absolute price impact of information disseminated by financial analysts is lower by 28%. Furthermore, the drop in price impact varies systematically with brokerage house and stock characteristics related to the level of selective disclosure prior to Regulation FD. Based on the time-series and cross-sectional evidence we conclude that Regulation FD has been effective in curtailing selective disclosure.
Document Type
Article
Keywords
Capital markets, financial analysts, government policy and regulation
Disciplines
Accounting
Source
SMU Cox: Accounting (Topic)
Language
English
