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Date of Award
Doctor of Philosophy (PhD)
This dissertation is comprised of two empirical essays that examine how different economic forces impact the collection and processing of information. The first essay is motivated by a disclosure theory that suggests a negative impact of disclosure regulation on managersՠinformation acquisition. When the regulator requires a disclosure of unfavorable information, m managers might reduce information collection to avoid the mandatory disclosure (e. g. , Matthews and Postlewaite 1985; Shavell 1994; Polinsky and Shavell 2010). This theory lacks empirical evidence due to the di_culty in measuring managersՠinformation collection behaviors. I overcome this challenge by investigating a 2007 regulation change that requires pharmaceutical ms to disclose newly found safety problems on their product labels. Using a di_erence-in-di_erence research design, I ޮd that ms collect less new safety information in the post-regulation period. My study highlights one unintended negative consequence of disclosure regulation: mandatory disclosure might reduce managersՠinformation production. The second essay is joint work with Zachary Kaplan and Xiumn Martin. We examine whether m managers selectively convey information to Thomson Reuters I/B/E/S, to inߵence the generating process of the EPS consensus. We ޮd that short-horizon optimistic forecasts are more likely to be removed from the I/B/E/S consensus calculation, after controlling for removal policies that I/B/E/S developed. This higher likelihood of removing optimistic forecasts is more pronounced when (i) the removals allows managers to meet or beat the I/B/E/S consensus, (ii) when managers have greater ability to inߵence I/B/E/S, and (iii) when costs of alternative options to achieve the meet-or-beat objective are higher. We also ޮd that discretionary removals improve consensus accuracy, suggesting that I/B/E/S benes from accepting the inߵence of m managers. Collectively, our ޮdings challenge the conventional view that I/B/E/S mechanically aggregates EPS forecasts from Wall Street analysts, and also yield insights into I/B/E/Sճ information production process.
Chair and Committee
Richard Frankel, Chad Ham, Zachary Kaplan, John Nachbar
Xie, Yifang, "Essays in Financial Accounting" (2020). Arts & Sciences Electronic Theses and Dissertations. 2256.
Available for download on Wednesday, May 15, 2120