The Timing and Frequency of Corporate Disclosures

The Timing and Frequency of Corporate Disclosures

Ivan Marinovic 

Stanford Graduate School of Business

Felipe Varas 

Duke University
January 23, 2014
Rock Center for Corporate Governance at Stanford University Working Paper No. 169

Abstract: 
This paper studies dynamic disclosure in an environment with continuous flow of private and public information. In equilibrium, the manager may both preempt or withhold bad news, depending on the relative importance of litigation risk vs. disclosure costs. Consistent with the evidence, we show that the fear of setting a strong disclosure precedent, may discourage managers from disclosing their information altogether. Our paper sheds light on the puzzling relation between disclosure and litigation. We show that in the presence of litigation risk a higher intensity of public news may increase disclosure; whereas in its absence it would reduce it. Surprisingly, a higher litigation risk may make the manager better off by inducing savings on disclosure costs. Our analysis suggests that the persistence of cash flows is a key determinant of the likelihood of disclosure that has not been considered by extant empirical research.

 

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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