Please use this identifier to cite or link to this item: http://scholarbank.nus.edu.sg/handle/10635/145431
Title: CLUSTERED DISCLOSURE UPON SCHEDULED MACRO NEWS ANNOUNCEMENTS: A REAL-OPTION BASED APPROACH
Authors: HU XIAOLI
Keywords: Scheduled Macro News Announcements, Real-option, Clustered Disclosure, Voluntary Disclosure, Timing of Disclosure, Disclosure Threshold
Issue Date: 26-Mar-2018
Citation: HU XIAOLI (2018-03-26). CLUSTERED DISCLOSURE UPON SCHEDULED MACRO NEWS ANNOUNCEMENTS: A REAL-OPTION BASED APPROACH. ScholarBank@NUS Repository.
Abstract: I adopt the real-option perspective and examine how scheduled macro news announcements shape the timing of corporate disclosure. Under the real-option framework, managers have incentive to wait until the realization of macro news to make disclosure decisions, which leads to the clustering of corporate disclosure. Employing the setting of U.S. FOMC pre-scheduled meetings, I empirically test whether managers time voluntary disclosure in a way consistent with this prediction. Using a Cox Duration model, I document that management voluntary disclosure clusters during the [1, 3] day window following FOMC announcements. Further analyses confirm the real option argument by showing that the clustering effect decreases with the cost of waiting and increases with the benefit of disclosure after FOMC announcements. The clustering effect is not driven by managers’ timely disclosure of updated private information, and managers’ career concerns do not play a significant role in the observed findings.
URI: http://scholarbank.nus.edu.sg/handle/10635/145431
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