He, Guanming, Ren, Mengbing Helen and Taffler, Richard J. (2021) Do enhanced derivative disclosures work? An informational perspective. Journal of Future Markets . (In Press)

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Abstract

Firms use derivatives both for hedging and non-hedging purposes. The Statement of Financial Accounting Standards No. 161 (SFAS 161) requires firms to disclose the purposes of their derivatives usage, thereby helping investors to evaluate the effects of derivatives usage on firm performance. Using a hand-collected sample of U.S. listed firms and a difference-in-differences research design, we find that, compared with non-derivative-users, derivative-users compliant with SFAS 161 experience a significantly greater reduction in stock illiquidity and the probability of informed trading in the post-SFAS 161 period, and such impact is evident only for firms with a high degree of investor attention.

Item Type:	Journal Article
Divisions:	Faculty of Social Sciences > Warwick Business School > Accounting Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	Journal of Future Markets
Publisher:	Wiley
ISSN:	0270-7314
Official Date:	2021
Dates:	Date Event 2021 Available 12 September 2021 Accepted
Status:	Peer Reviewed
Publication Status:	In Press
Publisher Statement:	This is the peer reviewed version of the following article: [FULL CITE], which has been published in final form at [Link to final article using the DOI]. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.
Access rights to Published version:	Restricted or Subscription Access
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