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Individual investors and financial disclosure

Journal

Journal of Accounting and Economics

Subject

Accounting

Authors / Editors

Lawrence A

Publication Year

2013

Abstract

Using detailed data of individual investors, this study shows that, on average, individuals invest more in firms with clear and concise financial disclosures. The results indicate this relation is less pronounced for high frequency trading and financially-literate individuals. The study also shows that individuals' returns are increasing with clearer and more concise disclosures, implying such disclosures reduce individuals' relative information disadvantage. Together, the findings suggest improved corporate disclosure practices benefit individual investors, in particular buy-and-hold investors.

Keywords

Individual investors; Financial disclosure; Individual characteristics; Information disadvantage

Available on ECCH

No


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