Public and Private Information: Firm Disclosure, SEC Letters, and the JOBS Act

Agarwal, Sumit; Gupta, Sudip; Israelsen, Ryan D.

doi:10.2139/ssrn.2891089

Cited by 16 publications

(5 citation statements)

References 7 publications

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“…We also contribute to a growing literature on the effects of the JOBS Act. Similar to our study, Barth, Landsman, and Taylor [] and Agarwal, Gupta, and Israelsen [] find that the reduction in mandated disclosure under the Act increases information uncertainty and leads to higher underpricing for EGCs. These studies, however, do not examine direct issue costs nor isolate the effects of the Act on those firms that are newly eligible for regulatory relief.…”

Section: Introductionsupporting

confidence: 88%

“…Barth, Landsman, and Taylor [2016] report additional evidence of increases in post-IPO volatility and bid-ask spreads that are consistent with greater information uncertainty after the Act. Agarwal, Gupta, and Israelsen [2016] analyze the mix of information that issuers disclose and show that the higher underpricing of EGCs is associated with more textual discussion of risk factors and not the disclosure of less accounting information.…”

Section: Introductionmentioning

confidence: 99%

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The JOBS Act and the Costs of Going Public

Chaplinsky

Hanley

Moon³

2017

J of Accounting Research

107

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We examine the effects of Title I of the Jumpstart Our Business Startups Act for a sample of 312 emerging growth companies (EGCs) that filed for an initial public offering (IPO) from April 5, 2012 through April 30, 2015. We find no reduction in the direct costs of issuance, accounting, legal, or underwriting fees for EGC IPOs. Underpricing, an indirect cost of issuance that increases an issuer's cost of capital, is significantly higher for EGCs compared to other IPOs. More importantly, greater underpricing is present only for larger firms that are newly eligible for scaled disclosure under the Act. Overall, we find little evidence that the Act in its first three years has reduced the measurable costs of going public. Although there are benefits of the Act that issuers appear to value, they should be balanced against the higher costs of capital that can occur after its enactment.

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Section: Introductionsupporting

confidence: 88%

Section: Introductionmentioning

confidence: 99%

The JOBS Act and the Costs of Going Public

Chaplinsky

Hanley

Moon³

2017

J of Accounting Research

107

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“…Our work is one of a growing number of text-based analyses of economic topics, such as banking, finance, accounting, mergers and acquisitions, or corporate innovation and fraud. Many use topic modeling methods akin to our methods [18][19][20][21] and apply them like we do to 10-K documents [18][19][20], while others mine other kinds of documents, such as IPO prospectuses [22][23][24] and analysts' reports and regulatory filings [23,[25][26][27].…”

Section: Analyze Diversity Trendsmentioning

confidence: 99%

Dropping diversity of products of large US firms: Models and measures

Nambiar,

Rubel,

McCaull

et al. 2021

Preprint

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It is widely assumed that in our lifetimes the products available in the global economy have become more diverse. This assumption is difficult to investigate directly, however, because it is difficult to collect the necessary data about every product in an economy each year. We solve this problem by mining publicly available textual descriptions of the products of every large US firms each year from 1997 to 2017. Although many aspects of economic productivity have been steadily rising during this period, our text-based measurements show that the diversity of the products of at least large US firms has steadily declined. This downward trend is visible using a variety of product diversity metrics, including some that depend on a measurement of the similarity of the products of every single pair of firms. The current state of the art in comprehensive and detailed firm-similarity measurements is a Boolean word vector model due to Hoberg and Phillips. We measure diversity using firm-similarities from this Boolean model and two more sophisticated variants, and we consistently observe a significant dropping trend in product diversity. These results make it possible to frame and start to test specific hypotheses for explaining the dropping product diversity trend.

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“…Since there is potentially an infinite number of bad investments, market efficiency provides little protection. This raises the question of what role is there for regulation versus a market solution (Agarwal, Gupta, and Israelsen 2016). We already see the emergence of intermediaries that can potentially take on the task of collecting and processing the soft information necessary to evaluate such investments (Catalini and Hui 2018).…”

Section: )mentioning

confidence: 99%