The Impact of Information Processing Costs on Firm Disclosure Choice: Evidence from the XBRL Mandate

Blankespoor, Elizabeth

doi:10.1111/1475-679x.12268

Cited by 164 publications

(71 citation statements)

References 75 publications

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“…Dong et al (2016) argue that the XBRL mandate reduces stock price synchronicity. Blankespoor (2014) finds that the XBRL mandate prompts firms to increase their footnote disclosures. As well, studies suggest that XBRL adoption reduces information asymmetry (Yoon et al 2011;Li et al 2013), provides incremental information content (Efendi et al 2016), increases information efficiency (Kim et al 2012), increases small institutions' responsiveness to 10-K information (Bhattacharya et al 2018), and constrains opportunistic earnings management (Kim et al 2013).…”

Section: Xbrl Background and Related Studiesmentioning

confidence: 99%

“…On the other hand, firms weigh the costs and benefits of disclosure (Diamond and Verrecchia 1991). Because XBRL facilitates investor use of firm-specific information, thus increasing the benefits of disclosure, firms increase their quantitative disclosures upon implementation of XBRL (Blankespoor 2014). As a consequence, the investor-perceived level of information uncertainty (information risk) decreases and more investors are subsequently attracted to XBRL firms, compared with non-XBRL firms.…”

Section: Impact Of Xbrl Adoption On Breadth Of Ownershipmentioning

confidence: 99%

“…Several XBRL studies focus on the equity market consequences of XBRL-induced changes in the information environment (e.g., Yoon et al 2011;Kim et al 2012;Li et al 2013;Blankespoor 2014;Liu et al 2014;Dong et al 2016;Efendi et al 2016). Fewer studies, however, consider whether reduced information-processing costs induced by XBRL affect a firm's ownership structure.…”

Section: Introductionmentioning

confidence: 99%

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Information‐Processing Costs and Breadth of Ownership

Kim

Liu

2019

Contemporary Accting Res

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Using the U.S. Securities and Exchange Commission's mandate of eXtensible Business Reporting Language (XBRL) as a natural experiment, this study investigates whether and how the decreased information‐processing costs brought about by XBRL influence firms’ breadth of share ownership. We find that the XBRL mandate is associated with an increase in the total number of a firm's shareholders. This finding is consistent with the notion that XBRL facilitates a more transparent environment and decreases information‐processing costs, thereby attracting more shareholders in general. More interestingly, we find that while XBRL adoption is associated with an increase in share ownership of individual and non‐U.S. foreign institutional investors, it is associated with a decrease in share ownership of U.S. domestic institutional investors. Further evidence shows that this asymmetric shift in share ownership is more pronounced for more complex firms. Our findings, taken together, suggest that the decreased information‐processing costs brought about by XBRL help firms establish a level playing field by reducing the information disadvantages of individual and foreign institutional investors over domestic institutional investors. Our results are robust to potential endogeneity concerns and alternative research designs.

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Section: Xbrl Background and Related Studiesmentioning

confidence: 99%

Section: Impact Of Xbrl Adoption On Breadth Of Ownershipmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Information‐Processing Costs and Breadth of Ownership

Kim

Liu

2019

Contemporary Accting Res

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“…Why do retail investors ignore accounting information? Blankespoor et al (2019) concluded that the cost of monitoring and acquiring accounting information demotivates retail investors using accounting disclosures in stock trading decisions. Although the cost of acquisition and processing of accounting information could avert traders using available accounting disclosures (Bhattacharya, 2001), sometimes they are reluctant to utilize all available information (Malmendier and Shanthikumar, 2007).…”

Section: Introductionmentioning

confidence: 99%

Adoption of principle-based IFRS and intercompany comparability of operating performance

Ghosh

Bairagi

Mondal

2020

AJAR

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PurposeThe study aims to investigate whether the adoption of IFRS could ensure ultimate intercompany comparability of operating performance in terms of uniformity in the application of accounting methods and reporting style.Design/methodology/approachUsing content analysis on 125 annual financial statements of 25 companies from five industries listed on the Dhaka Stock Exchange in Bangladesh, this study reports that only the sole adoption and application of principle based IFRS cannot ensure ultimate intercompany comparability of financial reports.FindingsThe findings document that the adoption of IFRS cannot ensure the application of same accounting methods as well as way of presentations which is a precondition of greater comparability of operating performance of competitive firms. The methodological and reporting direction through local regulatory agencies alongside maximum compliance with principle based IFRS can enhance intercompany comparability of financial reports in the same industry.Originality/valueThis study tries to manifest that sole adoption cum implementation of IFRS could not ensure ultimate intercompany comparability of operating performance within the same industry and urges to conduct further research to find out the ways to do so.

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“…Integration costs are relevant in papers including Miller [], Lawrence [], Maines and McDaniel [], Chapman et al. [], Drake, Thornock, and Twedt [], and Blankespoor [].…”

mentioning

confidence: 99%

Why Do Individual Investors Disregard Accounting Information? The Roles of Information Awareness and Acquisition Costs

Blankespoor

deHaan

Wertz

et al. 2018

J of Accounting Research

Self Cite

185

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We investigate the frictions that impede individual investors’ use of accounting information and, in particular, their costs of monitoring and acquiring accounting disclosures. We do so using an archival setting in which individuals are presented with automated media articles that report both current earnings news and past stock returns. Although these investors have earnings information readily available, we find no evidence that their trades incorporate it. Instead we find that their trading responds to the trailing stock returns presented in the articles. Our study raises questions about the efficacy of regulations that aim to aid less sophisticated investors by increasing their awareness of and access to accounting information.

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The Impact of Information Processing Costs on Firm Disclosure Choice: Evidence from the XBRL Mandate

Cited by 164 publications

References 75 publications

Information‐Processing Costs and Breadth of Ownership

Information‐Processing Costs and Breadth of Ownership

Adoption of principle-based IFRS and intercompany comparability of operating performance

Why Do Individual Investors Disregard Accounting Information? The Roles of Information Awareness and Acquisition Costs

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