On Tuesday, Oct 20th, 4 pm ET, we will be joined by Bin Ke (Penn State University).  Bin will be discussing his recent paper, entitled “Why do cross-listed firms voluntarily adopt Regulation Fair Disclosure?

The paper is co-authored with Michael Crawley and Yong Yu, both of whom are from the University of Texas at Austin.

The abstract of their paper reads:

We examine why many cross-listed firms voluntarily adopt Regulation Fair Disclosure (REG FD) from which they are explicitly exempt. We hypothesize and find that cross-listed firms’ voluntary REG FD adoption is due to externalities resulting from U.S. firms’ forced adoption of REG FD. First, following REG FD cross-listed firms that continue to use a selective disclosure policy become less attractive than U.S. firms to U.S. investors (especially retail investors) who were previously at a disadvantage in information access to corporate management. Second, U.S. firms’ forced adoption of REG FD creates an information spillover on cross-listed firms whose receipt of information is positively correlated with that of U.S. firms. These two effects induce many cross-listed firms to voluntarily follow REG FD. Relative to non-adopters, REG FD adopters enjoy a significant reduction in the information asymmetry component of cost of capital, suggesting that the voluntary adoption is a credible commitment to increased disclosure transparency.

Please join us on Tuesday!

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