I thank Bill Francis, Iftekhar Hasan, and in particular an anonymous referee for helpful comments. I gratefully acknowledge the able research assistance of Brian Clark. All remaining errors are my own.
Corporate Disclosure, Market Valuation, and Firm Performance
Article first published online: 21 SEP 2011
© 2011 Financial Management Association International
Volume 40, Issue 3, pages 647–676, Fall 2011
How to Cite
Jiao, Y. (2011), Corporate Disclosure, Market Valuation, and Firm Performance. Financial Management, 40: 647–676. doi: 10.1111/j.1755-053X.2011.01156.x
- Issue published online: 21 SEP 2011
- Article first published online: 21 SEP 2011
In this paper, I study the relationship between the Association for Investment Management and Research disclosure rankings and several corporate performance measures. I find a positive relationship between these rankings and stock returns. Furthermore, disclosure rankings are highly correlated with firm value. Specifically, Qs of firms ranked at the top of disclosure rankings are 35% higher than those of firms ranked at the bottom. I also find positive associations between disclosure rankings and future net profit margins, sales growth, and research and development intensity. Finally, I document a positive correlation between changes in disclosure rankings and future earnings surprises.