Regulation Fair Disclosure and the Determinants of Analyst Coverage

Yutao Li

doi:doi:10.11648/j.jfa.20150306.15

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Regulation Fair Disclosure and the Determinants of Analyst Coverage

Yutao Li

Published in Journal of Finance and Accounting (Volume 3, Issue 6)

Received: 18 October 2015 Accepted: 26 October 2015 Published: 13 November 2015

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Abstract

Using a sample of 49,956 firm-years from the United States of American, this study documents that analysts place significant less weight on firm size, return volatility, and more weight on trading volume in deciding which firms to issue earnings forecasts after the passage of Regulation Fair Disclosure (Reg FD) in 2000. The evidence of this study suggests that Reg FD leveled playing field among analysts, lowering the costs of covering smaller and risky firms for analysts.

Published in	Journal of Finance and Accounting (Volume 3, Issue 6)
DOI	10.11648/j.jfa.20150306.15
Page(s)	205-210
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Reg FD, Analyst Coverage, Determinants of Analyst Coverage, Regulation, Competitive Advantage

References

[1]	Association for Investment Management and Research (AIMR). (2001). FD e–survey Summary. Website. http://www.aimr. Com/pressroom/01releases/regfdsurveysum.htm.
[2]	Barth, M.E., R. Kasznik, and M.F. McNichols. (2001). “Analyst Coverage and Intangible Assets.” Journal of Accounting Research 39 (1): 1-33
[3]	Bhushan, R. (1989). “Firm Characteristics and Analyst Following.” Journal of Accounting and Economics (11):255-74.
[4]	Bloomberg News. 1999. SEC may bar selective disclosures by firms. Los Angeles Times (March 17).
[5]	Brennan, M. and P. Hughes. (1991) “Stock Prices and the Supply of Information.” The Journal of Finance 46: 1665–91.
[6]	Cameron, A. Trivedi, P. (1990). “Regression-based Tests for Over-dispersion in the Poisson Model”. Journal of Econometrics (46). pp. 347-364
[7]	Francis, J, D., Nanda, and X., Wang (2006). "Re-Examining the Effects of Regulation Fair Disclosure using Foreign Listed Firms to Control for Concurrent Shocks". Journal of Accounting and Economics 41(3): 271-292
[8]	Fortin R. and G. Roth. Analyst coverage of small cap firms in a period of brokerage firm retrenchment. Journal of Business and Economics Research (5): 17: 61-68
[9]	Heflin, F., K. R. Subramanyam, and Y. Zhang. (2003). “Regulation FD and the financial information environment: Early evidence”. The Accounting Review 78 (1): 1–37
[10]	Irani, A.J. and I. Karamanou. (2003). “Regulation of Fair Disclosure, Analyst Following, and Analyst Forecast Dispersion.” Accounting Horizons (12):15-29
[11]	Lang, M.H. and R.J.Lundholm. (1996). “Corporate Disclosure Policy and Analyst Behaviour” The Accounting Review (71):467 – 492
[12]	Merton, R.C. (1987). “A simple model of capital market equilibrium with incomplete information”. The Journal of Finance (42): 483–510.
[13]	Mohanram R.S. and S.V. Sunder (2006) “How Has Regulation FD Affected the Operations of Financial Analysts?” Contemporary Accounting Research (23):491-525
[14]	O’Brien, P. and Bhushan, R. (1990). “Analyst following and Institutional Ownership.” Journal of Accounting Research (28):55-76.
[15]	Securities and Exchange Commission (SEC). 2000. Selective Disclosure and Insider Trading. Release Nos. 33 – 7881, 34 – 43154. Washington, DC: SEC.
[16]	Shon, J. and S. M. Young (2011). Determinants of analysts’ dropped coverage decision: The role of analyst incentives, experience, and accounting fundamentals. Journal of Business Finance & Accounting 38(7-8): 861-886
[17]	Young, S.M. and E. Y. Peng (2013). An analysis of accounting frauds and the timing of analyst coverage decisions and recommendation revisions: evidence from the US. Journal of Business Financed & Accounting 40 (3-4): 399-439.

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APA Style

Yutao Li. (2015). Regulation Fair Disclosure and the Determinants of Analyst Coverage. Journal of Finance and Accounting, 3(6), 205-210. https://doi.org/10.11648/j.jfa.20150306.15

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ACS Style

Yutao Li. Regulation Fair Disclosure and the Determinants of Analyst Coverage. J. Finance Account. 2015, 3(6), 205-210. doi: 10.11648/j.jfa.20150306.15

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AMA Style

Yutao Li. Regulation Fair Disclosure and the Determinants of Analyst Coverage. J Finance Account. 2015;3(6):205-210. doi: 10.11648/j.jfa.20150306.15

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@article{10.11648/j.jfa.20150306.15,
  author = {Yutao Li},
  title = {Regulation Fair Disclosure and the Determinants of Analyst Coverage},
  journal = {Journal of Finance and Accounting},
  volume = {3},
  number = {6},
  pages = {205-210},
  doi = {10.11648/j.jfa.20150306.15},
  url = {https://doi.org/10.11648/j.jfa.20150306.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20150306.15},
  abstract = {Using a sample of 49,956 firm-years from the United States of American, this study documents that analysts place significant less weight on firm size, return volatility, and more weight on trading volume in deciding which firms to issue earnings forecasts after the passage of Regulation Fair Disclosure (Reg FD) in 2000. The evidence of this study suggests that Reg FD leveled playing field among analysts, lowering the costs of covering smaller and risky firms for analysts.},
 year = {2015}
}

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TY  - JOUR
T1  - Regulation Fair Disclosure and the Determinants of Analyst Coverage
AU  - Yutao Li
Y1  - 2015/11/13
PY  - 2015
N1  - https://doi.org/10.11648/j.jfa.20150306.15
DO  - 10.11648/j.jfa.20150306.15
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 205
EP  - 210
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20150306.15
AB  - Using a sample of 49,956 firm-years from the United States of American, this study documents that analysts place significant less weight on firm size, return volatility, and more weight on trading volume in deciding which firms to issue earnings forecasts after the passage of Regulation Fair Disclosure (Reg FD) in 2000. The evidence of this study suggests that Reg FD leveled playing field among analysts, lowering the costs of covering smaller and risky firms for analysts.
VL  - 3
IS  - 6
ER  -

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Author Information

Yutao Li

Faculty of Management, University of Lethbridge, Lethbridge, Canada

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Plain Text BibTeX RIS

APA Style

Yutao Li. (2015). Regulation Fair Disclosure and the Determinants of Analyst Coverage. Journal of Finance and Accounting, 3(6), 205-210. https://doi.org/10.11648/j.jfa.20150306.15

Copy | Download

ACS Style

Yutao Li. Regulation Fair Disclosure and the Determinants of Analyst Coverage. J. Finance Account. 2015, 3(6), 205-210. doi: 10.11648/j.jfa.20150306.15

Copy | Download

AMA Style

Yutao Li. Regulation Fair Disclosure and the Determinants of Analyst Coverage. J Finance Account. 2015;3(6):205-210. doi: 10.11648/j.jfa.20150306.15

Copy | Download

@article{10.11648/j.jfa.20150306.15,
  author = {Yutao Li},
  title = {Regulation Fair Disclosure and the Determinants of Analyst Coverage},
  journal = {Journal of Finance and Accounting},
  volume = {3},
  number = {6},
  pages = {205-210},
  doi = {10.11648/j.jfa.20150306.15},
  url = {https://doi.org/10.11648/j.jfa.20150306.15},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20150306.15},
  abstract = {Using a sample of 49,956 firm-years from the United States of American, this study documents that analysts place significant less weight on firm size, return volatility, and more weight on trading volume in deciding which firms to issue earnings forecasts after the passage of Regulation Fair Disclosure (Reg FD) in 2000. The evidence of this study suggests that Reg FD leveled playing field among analysts, lowering the costs of covering smaller and risky firms for analysts.},
 year = {2015}
}

Copy | Download

TY  - JOUR
T1  - Regulation Fair Disclosure and the Determinants of Analyst Coverage
AU  - Yutao Li
Y1  - 2015/11/13
PY  - 2015
N1  - https://doi.org/10.11648/j.jfa.20150306.15
DO  - 10.11648/j.jfa.20150306.15
T2  - Journal of Finance and Accounting
JF  - Journal of Finance and Accounting
JO  - Journal of Finance and Accounting
SP  - 205
EP  - 210
PB  - Science Publishing Group
SN  - 2330-7323
UR  - https://doi.org/10.11648/j.jfa.20150306.15
AB  - Using a sample of 49,956 firm-years from the United States of American, this study documents that analysts place significant less weight on firm size, return volatility, and more weight on trading volume in deciding which firms to issue earnings forecasts after the passage of Regulation Fair Disclosure (Reg FD) in 2000. The evidence of this study suggests that Reg FD leveled playing field among analysts, lowering the costs of covering smaller and risky firms for analysts.
VL  - 3
IS  - 6
ER  -

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