We investigate analysts’ and institutions’ access to 10-K information before and after XBRL adoption over the period 2005 to 2011. We find that analysts employed by smaller brokerages, institutions with smaller asset holdings and mutual funds with smaller fund families enjoy significantly better access to financial information relative to their larger counterparts following the XBRL adoption. While we find similar results when we separately examine transient institutions, we observe no effect of XBRL mandate on the trading activities of non-transient institutions suggesting that XBRL’s perceived advantages are material only in the short-run following the 10-K releases. Leveling of the informational playing field between large and small institutions would induce greater competition for information among them, and likely make the whole sector more efficient. This could be beneficial for the overall economy. Given that individuals increasingly participate in the markets through institutions, households could also indirectly benefit from such a development.
Accounting | Corporate Finance
Financial Performance Analysis
American Accounting Association Annual Meeting 2014, August 2-6
City or Country
CHO, Young Jun; BHATTACHARYA, Nilabhra; and KIM, Jae Bum.
XBRL Mandate and Access to Information: Evidence from Reactions of Financial Analysts and Institutional Investors. (2014). American Accounting Association Annual Meeting 2014, August 2-6. Research Collection School Of Accountancy.
Available at: http://ink.library.smu.edu.sg/soa_research/1280
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