We examine the effect of Markets in Financial Instruments Directive (MiFID) II’s controversial unbundling provision on corporate voluntary disclosure. Although prior research has largely focused changes sell-side post-MiFID II, disclosure and their effects information environment are less known. find that European Union (EU) firms significantly increased propensity frequency management earnings guidance issuance after MiFID II enactment. This is more pronounced among experiencing a decline...

ABSTRACT We document significant increases in bond market liquidity around earnings announcements. These are attributed to decreased search and bargaining costs, which arise from the over‐the‐counter (OTC) nature of markets outweigh information asymmetry during these periods. Our evidence traces reductions costs two sources announcements: (1) improved access dealers (2) increased participation institutional investors, who can more easily transact with multiple dealers. Overall, our findings...

We study whether and how creditors exercise their control rights to shape borrowers' executive compensation plans. Highly levered borrowers often face incentives underinvest due agency conflicts driven by differences in time horizon risk-taking preferences between managers creditors. Thus, we expect that exert ensure plans encourage investments with longer-term payoffs provide more direct rewards for profitable outcomes. also argue executives' bonus become relatively important these...

Several recent empirical papers assert that the decision to disclose an earnings forecast shortly before actual announcement reveals only short-term information and is therefore unlikely entail proprietary costs. Using a simple dynamic model of voluntary disclosure, we show managers’ private about long-term future performance. We test predictions empirically find predicts three years beyond forecasted period, predictive ability incremental itself. Consistent with our model, for performance...

We document significant increases in bond market liquidity around earnings announcements. These are attributed to decreased search and bargaining costs, which arise from the over-the-counter (OTC) nature of markets outweigh information asymmetry during these periods. Our evidence traces reductions costs two sources announcements: (i) improved access dealers (ii) increased participation institutional investors, who can more easily transact with multiple dealers. Overall, our findings...

We propose a measure of disagreement, which reflects differences opinion as opposed to information asymmetry, that can be extracted from sequences analyst forecasts. Using Bayesian theoretical framework, we prove that, when analysts agree, regression an analyst's forecast on the previous issued by another should have slope coefficient one. The magnitude estimated coefficient's deviation one is then employed disagreement measure. validate using tests tied predicted relations between and...

The countervailing effect of MiFID II's unbundling provision, which requires brokerages to separate research costs from trading execution costs, on the capital market has led controversies about its efficacy and potential rollback. In this paper, we examine role firms' voluntary disclosure amidst these controversies. Using a difference-in-differences analysis, find that EU firms significantly increase likelihood frequency earnings guidance following implementation II. This is larger for...

This paper shows that past disclosure decisions cause the current decision using a Bayesian hierarchical model flexibly accounts for firm economic characteristics may explain persistence in decisions. A management forecast prior quarter, relative to its absence increases likelihood of issuance quarter by about 70 percentage points. The distribution this causal effect over cross section exhibits empirical patterns consistent with existing dynamic theories. adds growing evidence on sources...