Regulation Fair Disclosure and Earnings Information: Market, Analyst, and Corporate Responses


  • Warren Bailey,

  • Haitao Li,

  • Connie X. Mao,

  • Rui Zhong

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    • Bailey and Li are from Cornell University, Mao is from Temple University, and Zhong is from Fordham University. We are grateful to First Call/Thompson Financial and I/B/E/S for providing us with much of the data used in our study. We thank the editor, Rick Green, and the anonymous referee for many useful comments. We thank Haluk Unal, Rex Thompson, and Kumar Venkataraman for helpful discussions, Charles M. C. Lee for help in obtaining the First/Call database, and Mancang Dong for technical support. Previous versions of this paper circulated under the title “Regulation FD and Market Behavior around Earnings Announcements: Is the Cure Worse than the Disease?” Any errors are our own.


With the adoption of Regulation Fair Disclosure (Reg FD), market behavior around earnings releases displays no significant change in return volatility (after controlling for decimalization of stock trading) but significant increases in trading volume due to difference in opinion. Analyst forecast dispersion increases, and increases in other measures of disagreement and difference of opinion suggest greater difficulty in forming forecasts beyond the current quarter. Corporations increase the quantity of voluntary disclosures, but only for current quarter earnings. Thus, Reg FD seems to increase the quantity of information available to the public while imposing greater demands on investment professionals.