Purpose – The purpose of this paper is to study the relation between financial analysts’ ratings of firms’ disclosure policies and the intraday pattern in spreads between specialists’ bid and ask price quotes. Design/methodology/approach – Measure of the disclosure policy is based on...

Prior research suggests a negative relation between disclosure and costs of capital, but Francis, Nanda, and Olsson (2008; hereafter, FNO) find the relation weakens considerably or disappears after controlling for earnings quality. Their results suggest that prior research may incorrectly attribute...

We investigate changes in financial reporting conservatism arising from disclosure-related shareholder lawsuits filed between 1996 and 2016. We find that sued firms respond to 10b-5 litigation with increased accounting conservatism. Consistent with a spillover effect, we also find that non-sued...