Tick Size and Earnings Guidance in Small-Cap Firms: Evidence from the SEC’s Tick Size Pilot Program

References

• Ahmed AS, Li Y, Xu N (2020) Tick size and financial reporting quality in small‐cap firms: Evidence from a natural experiment. J. Accounting Res. 58(4):869–914.Crossref, Google Scholar
• Ajinkya B, Bhojraj S, Sengupta P (2005) The association between outside directors, institutional investors and the properties of management earnings forecasts. J. Accounting Res. 43(3):343–376.Crossref, Google Scholar
• Al Guindy MA, Naughton JP, Riordan R (2020) The chilling effect of regulation FD: Evidence from the SEC endorsement of social media. Preprint, submitted April 15, https://dx.doi.org/10.2139/ssrn.3385180.Google Scholar
• Albert A, Anderson JA (1984) On the existence of maximum likelihood estimates in logistic regression models. Biometrika 71(1):1–10.Crossref, Google Scholar
• Albuquerque R, Song S, Yao C (2020) The price effects of liquidity shocks: A study of the SEC’s tick size experiment. J. Financial Econom. 138(3):700–724.Crossref, Google Scholar
• Amihud Y (2002) Illiquidity and stock returns: Cross-section and time-series effects. J. Financial Markets 5(1):31–56.Crossref, Google Scholar
• Anantharaman D, Zhang Y (2011) Cover me: Managers’ responses to changes in analyst coverage in the post-regulation FD period. Accounting Rev. 86(6):1851–1885.Crossref, Google Scholar
• Balakrishnan K, Billings M, Kelly B, Ljungqvist A (2014) Shaping liquidity: On the causal effects of voluntary disclosure. J. Finance 69(5):2237–2278.Crossref, Google Scholar
• Bamber LS, Cheon YS (1998) Discretionary management earnings forecast disclosures: Antecedents and outcomes associated with forecast venue and forecast specificity choices. J. Accounting Res. 36(2):167–190.Crossref, Google Scholar
• Beyer A, Cohen DA, Lys TZ, Walther BR (2010) The financial reporting environment: Review of the recent literature. J. Accounting Econom. 50(2–3):296–343.Crossref, Google Scholar
• Blankespoor E, deHaan E, Marinovic I (2020) Disclosure processing costs, investors’ information choice, and equity market outcomes: A review. J. Accounting Econom. 70(2–3):101344.Crossref, Google Scholar
• Bond P, Edmans A, Goldstein I (2012) The real effects of financial markets. Annu. Rev. Financial Econom. 4(1):339–360.Crossref, Google Scholar
• Bourveau T, Lou Y, Wang R (2018) Shareholder litigation and corporate disclosure: Evidence from derivative lawsuits. J. Accounting Res. 56(3):797–842.Crossref, Google Scholar
• Bushee BJ, Core JE, Guay W, Hamm SJ (2010) The role of the business press as an information intermediary. J. Accounting Res. 48(1):1–19.Crossref, Google Scholar
• Carhart MM (1997) On persistence in mutual fund performance. J. Finance 52(1):57–82.Crossref, Google Scholar
• Callen JL, Fang X, Zhang W (2020) Protection of proprietary information and financial reporting opacity: Evidence from a natural experiment. J. Corporate Finance 64:101641.Crossref, Google Scholar
• Cao SS, Ma G, Tucker JW, Wan C (2018) Technological peer pressure and product disclosure. Accounting Rev. 93(6):95–126.Crossref, Google Scholar
• Chang X, Dasgupta S, Hilary G (2006) Analyst coverage and financing decisions. J. Finance 61(6):3009–3048.Crossref, Google Scholar
• Chang X, Dasgupta S, Hilary G (2009) The effect of auditor quality on financing decisions. Accounting Rev. 84(4):1085–1117.Crossref, Google Scholar
• Chen S, Chen X, Cheng Q (2008) Do family firms provide more or less voluntary disclosure? J. Accounting Res. 46(3):499–536.Crossref, Google Scholar
• Chen Y, Ng J, Yang X (2021) Talk less, learn more: Strategic disclosure in response to managerial learning from the options market. J. Accounting Res. 59(5):1609–1649.Crossref, Google Scholar
• Cheynel E (2013) A theory of voluntary disclosure and cost of capital. Rev. Accounting Stud. 18(4):987–1020.Crossref, Google Scholar
• Chow CW, Wong-Boren A (1987) Voluntary financial disclosure by Mexican corporations. Accounting Rev. 62(3):533–541.Google Scholar
• Chung KH, Lee AJ, Rösch D (2020) Tick size, liquidity for small and large orders, and price informativeness: Evidence from the Tick Size Pilot Program. J. Financial Econom. 136(3):879–899.Crossref, Google Scholar
• Coller M, Yohn TL (1997) Management forecasts and information asymmetry: An examination of bid-ask spreads. J. Accounting Res. 35(2):181–191.Crossref, Google Scholar
• Collins DW, Pungaliya RS, Vijh AM (2017) The effects of firm growth and model specification choices on tests of earnings management in quarterly settings. Accounting Rev. 92(2):69–100.Crossref, Google Scholar
• Cotter J, Tuna I, Wysocki PD (2006) Expectations management and beatable targets: How do analysts react to explicit earnings guidance? Contemp. Accounting Res. 23(3):593–624.Crossref, Google Scholar
• Cox C (1985) Further evidence on the representativeness of management earnings forecasts. Accounting Rev. 60:692–701.Google Scholar
• Dechow PM, Sloan RG, Sweeney AP (1995) Detecting earnings management. Accounting Rev. 70(2):193–225.Crossref, Google Scholar
• Diamond DW, Verrecchia RE (1991) Disclosure, liquidity, and the cost of capital. J. Finance 46(4):1325–1359.Crossref, Google Scholar
• Drake MS, Roulstone DT, Thornock JR (2015) The determinants and consequences of information acquisition via EDGAR. Contemp. Accounting Res. 32(3):1128–1161.Crossref, Google Scholar
• Ellis JA, Fee CE, Thomas SE (2012) Proprietary costs and the disclosure of information about customers. J. Accounting Res. 50(3):685–727.Crossref, Google Scholar
• Francis J, Nanda D, Olsson P (2008) Voluntary disclosure, earnings quality, and cost of capital. J. Accounting Res. 46(1):53–99.Crossref, Google Scholar
• Francis JR, Khurana IK, Pereira R (2005) Disclosure incentives and effects on cost of capital around the world. Accounting Rev. 80(4):1125–1162.Crossref, Google Scholar
• Gao P, Liang PJ (2013) Informational feedback, adverse selection, and optimal disclosure policy. J. Accounting Res. 51(5):1133–1158.Crossref, Google Scholar
• Glaeser S (2018) The effects of proprietary information on corporate disclosure and transparency: Evidence from trade secrets. J. Accounting Econom. 66(1):163–193.Crossref, Google Scholar
• Goettler RL, Parlour CA, Rajan U (2005) Equilibrium in a dynamic limit order market. J. Finance 60(5):2149–2192.Crossref, Google Scholar
• Griffith TG, Roseman BS (2019) Making cents of tick sizes: The effect of the 2016 US SEC tick size pilot on limit order book liquidity. J. Banking Finance 101:104–121.Crossref, Google Scholar
• He J, Plumlee M (2020) Measuring disclosure using 8-K filings. Rev. Accounting Stud. 25(3):903–962.Crossref, Google Scholar
• Healy PM, Palepu KG (2001) Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. J. Accounting Econom. 31(1–3):405–440.Crossref, Google Scholar
• Hope OK, Liu J (2022) Does stock liquidity shape voluntary disclosure? Evidence from the SEC tick size pilot program. Rev. Accounting Stud., ePub ahead of print April 18, https://doi.org/10.1007/s11142-022-09686-0.Crossref, Google Scholar
• Houston JF, Lev B, Tucker JW (2010) To guide or not to guide? Causes and consequences of stopping quarterly earnings guidance. Contemp. Account. Res. 27(1):143–185.Crossref, Google Scholar
• Huang S, Ng J, Ranasinghe T, Zhang M (2021) Do innovative firms communicate more? Evidence from the relation between patenting and management guidance. Accounting Rev. 96(1):273–297.Crossref, Google Scholar
• Huang Y, Jennings R, Yu Y (2017) Product market competition and managerial disclosure of earnings forecasts: Evidence from import tariff rate reductions. Accounting Rev. 92(3):185–207.Crossref, Google Scholar
• Hutton AP, Lee LF, Shu SZ (2012) Do managers always know better? The relative accuracy of management and analyst forecasts. J. Accounting Res. 50(5):1217–1244.Crossref, Google Scholar
• Jayaraman S, Wu JS (2020) Should I stay or should I grow? Using voluntary disclosure to elicit market feedback. Rev. Financial Stud. 33(8):3854–3888.Crossref, Google Scholar
• Johnson TL, Kim J, So EC (2020) Expectations management and stock returns. Rev. Financial Stud. 33(10):4580–4626.Crossref, Google Scholar
• Jones DA (2007) Voluntary disclosure in R&D-intensive industries. Contemp. Accounting Res. 24(2):489–522.Crossref, Google Scholar
• Jones JJ (1991) Earnings management during import relief investigations. J. Accounting Res. 29:193–228.Crossref, Google Scholar
• Kasznik R, Lev B (1995) To warn or not to warn: Management disclosures in the face of an earnings surprise. Accounting Rev. 70:113–134.Google Scholar
• Kim I, Skinner DJ (2012) Measuring securities litigation risk. J. Accounting Econom. 53(1–2):290–310.Crossref, Google Scholar
• Kim J, Valentine K (2021) The innovation consequences of mandatory patent disclosures. J. Accounting Econom. 71(2–3):101381.Crossref, Google Scholar
• Kim J, Valentine K (2023) Public firm disclosures and the market for innovation. J. Accounting Econom. 76(1):101577.Crossref, Google Scholar
• Kim JB, Shroff P, Vyas D, Wittenberg‐Moerman R (2018) Credit default swaps and managers’ voluntary disclosure. J. Accounting Res. 56(3):953–988.Crossref, Google Scholar
• Koch AS, Lefanowicz CE, Robinson JR (2013) Regulation FD: A review and synthesis of the academic literature. Accounting Horizons 27(3):619–646.Crossref, Google Scholar
• Korajczyk RA, Levy A (2003) Capital structure choice: Macroeconomic conditions and financial constraints. J. Financial Econom. 68(1):75–109.Crossref, Google Scholar
• Kothari SP (2001) Capital markets research in accounting. J. Accounting Econom. 31(1–3):105–231.Crossref, Google Scholar
• Kothari SP, Leone AJ, Wasley CE (2005) Performance matched discretionary accrual measures. J. Accounting Econom. 39(1):163–197.Crossref, Google Scholar
• Kothari SP, Li X, Short JE (2009) The effect of disclosures by management, analysts, and business press on cost of capital, return volatility, and analyst forecasts: A study using content analysis. Accounting Rev. 84(5):1639–1670.Crossref, Google Scholar
• Lee C, Watts E (2021) Tick size tolls: Can a trading slowdown improve earnings news discovery? Accounting Rev. 96(3):373–401.Crossref, Google Scholar
• Leuz C, Wysocki PD (2016) The economics of disclosure and financial reporting regulation: Evidence and suggestions for future research. J. Accounting Res. 54(2):525–622.Crossref, Google Scholar
• Li X, Yang HI (2016) Mandatory financial reporting and voluntary disclosure: The effect of mandatory IFRS adoption on management forecasts. Accounting Rev. 91(3):933–953.Crossref, Google Scholar
• Li Y, Lin Y, Zhang L (2018) Trade secrets law and corporate disclosure: Causal evidence on the proprietary cost hypothesis. J. Accounting Res. 56(1):265–308.Crossref, Google Scholar
• Loughran T, McDonald B (2017) The use of EDGAR filings by investors. J. Behav. Finance 18(2):231–248.Crossref, Google Scholar
• Maslar DA, Serfling M, Shaikh S (2021) Economic downturns and the informativeness of management earnings guidance. J. Accounting Res. 59(4):1481–1520.Crossref, Google Scholar
• Massa M, Zhang B, Zhang H (2015) The invisible hand of short selling: Does short selling discipline earnings management? Rev. Financial Stud. 28(6):1701–1736.Crossref, Google Scholar
• Matsumoto DA (2002) Management’s incentives to avoid negative earnings surprises. Accounting Rev. 77(3):483–514.Crossref, Google Scholar
• Merkley KJ (2014) Narrative disclosure and earnings performance: Evidence from R&D disclosures. Accounting Rev. 89(2):725–757.Crossref, Google Scholar
• Nagar V, Schoenfeld J, Wellman L (2019) The effect of economic policy uncertainty on investor information asymmetry and management disclosures. J. Accounting Econom. 67(1):36–57.Crossref, Google Scholar
• Noh S, So EC, Weber JP (2019) Voluntary and mandatory disclosures: Do managers view them as substitutes? J. Accounting Econom. 68(1):101243.Crossref, Google Scholar
• Patell JM (1976) Corporate forecasts of earnings per share and stock price behavior: Empirical test. J. Accounting Res. 14(2):246–276.Crossref, Google Scholar
• Rawson C (2022) Manager perception and proprietary investment disclosure. Rev. Accounting Stud. 27:1493–1525.Crossref, Google Scholar
• Rindi B, Werner I (2019) US tick size pilot. Working paper, Ohio State University, Columbus, OH.Google Scholar
• Rogers J, Stocken P (2005) Credibility of management forecasts. Accounting Rev. 80(4):1233–1260.Crossref, Google Scholar
• Rogers JL, Van Buskirk A (2013) Bundled forecasts in empirical accounting research. J. Accounting Econom. 55(1):43–65.Crossref, Google Scholar
• Ryans JP (2017) Using the EDGAR log file data set. Preprint, submitted February 8, https://dx.doi.org/10.2139/ssrn.2913612.Google Scholar
• Ryans JP (2021) Textual classification of SEC comment letters. Rev. Accounting Stud. 26(1):37–80.Crossref, Google Scholar
• Stiglitz JE (2014) Tapping the brakes: Are less active markets safer and better for the economy? https://www.frbatlanta.org/-/media/documents/news/conferences/2014/fmc/Stiglitz.pdf.Google Scholar
• Verrecchia RE (1983) Discretionary disclosure. J. Accounting Econom. 5:179–194.Crossref, Google Scholar
• Verrecchia RE (2001) Essays on disclosure. J. Accounting Econom. 32(1–3):97–180.Crossref, Google Scholar
• Weller BM (2018) Does algorithmic trading reduce information acquisition? Rev. Financial Stud. 31(6):2184–2226.Crossref, Google Scholar
• Ye M, Zheng MY, Zhu W (2023) The effect of tick size on managerial learning from stock prices. J. Accounting Econom. 75(1):101515.Google Scholar
• Zuo L (2016) The informational feedback effect of stock prices on management forecasts. J. Accounting Econom. 61(2–3):391–413.Crossref, Google Scholar