Policy Uncertainty and Textual Disclosure

Liangliang Jiang, Jeffrey A. Pittman, Walid Saffar

Research output: Journal article publicationJournal articleAcademic researchpeer-review

9 Citations (Scopus)

Abstract

We study how policy uncertainty influences textual disclosure in the U.S. from 1996 to 2015. Consistent with incentives for voluntary disclosure, we find that policy uncertainty increases textual disclosure quantity, as evident in disclosure length, but lowers textual readability and increases the tone of uncertainty and negativity. We also document that the negative impact on readability subsides when firms are subject to tough external monitoring. Finally, we provide evidence implying that investors perceive such disclosure to be valuable, as evident in cheaper equity financing costs under economic policy uncertainty.

Original languageEnglish
Pages (from-to)113-131
Number of pages19
JournalAccounting Horizons
Volume36
Issue number4
DOIs
Publication statusPublished - 1 Dec 2022

Keywords

  • firm disclosure
  • policy uncertainty
  • textual disclosure

ASJC Scopus subject areas

  • Accounting

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