The impact of statutory sanctions on the level and information content of voluntary corporate disclosure

Philip Brown*, Stephen L. Taylor, Terry S. Walter

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapterpeer-review

Abstract

The extent to which corporate disclosures can be influenced by the threat of civil and criminal penalties has been debated extensively (Friend, 1976). For example, Stigler (1964) compares the post-listing perfonnance of United States equity issues before and after the Securities Exchange Commission (SEC) was given control over the registration of new issues (via the Securities and Exchange Act, 1934). Although Stigler concludes the legislation was ineffective, his empirical method is relatively naive, requiring an assumption that market-adjusted post-listing stock returns have no 'time-specific' elements, and can be compared purely on the basis of a legislative intervention date (Friend, 1976). Benston's (1973) investigation of 'disclosure improvements' following the 1934 Securities and Exchange Act also relies on the critical assumption that a proxy for the extent of corporate disclosure (i.e., price volatility) is otherwise temporally constant.
Original languageEnglish
Title of host publicationFinancial accounting and equity markets
Subtitle of host publicationthe selected essays of Philip Brown
EditorsPhilip Brown
Place of PublicationNew York, NY
PublisherTaylor & Francis
Chapter11
Pages207-231
Number of pages25
ISBN (Print)9780415814614, 9780203067024
Publication statusPublished - 1 Jan 2013

Publication series

NameRoutledge historical perspectives in accounting
PublisherRoutledge

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