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Do enhanced derivative disclosures work? An informational perspective
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He, Guanming, Ren, Helen Mengbing and Taffler, Richard J. (2022) Do enhanced derivative disclosures work? An informational perspective. Journal of Future Markets, 42 (1). pp. 24-60. doi:10.1002/fut.22275
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Official URL: https://doi.org/10.1002/fut.22275
Abstract
Firms use derivatives both for hedging and nonhedging 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 US listed firms and a difference-in-differences research design, we find that, compared with nonderivative-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 | ||||||||
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| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance |
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| Divisions: | Faculty of Social Sciences > Warwick Business School > Accounting Faculty of Social Sciences > Warwick Business School |
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| Library of Congress Subject Headings (LCSH): | Derivative securities, Information asymmetry, Liquidity (Economics), Financial risk management | ||||||||
| Journal or Publication Title: | Journal of Future Markets | ||||||||
| Publisher: | Wiley | ||||||||
| ISSN: | 0270-7314 | ||||||||
| Official Date: | January 2022 | ||||||||
| Dates: |
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| Volume: | 42 | ||||||||
| Number: | 1 | ||||||||
| Page Range: | pp. 24-60 | ||||||||
| DOI: | 10.1002/fut.22275 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Reuse Statement (publisher, data, author rights): | This is the peer reviewed version of the following article: He, G., Ren, H. M., & Taffler, R. (2021). Do enhanced derivative disclosures work? An informational perspective. Journal of Futures Markets, 1– 37. which has been published in final form at https://doi.org/10.1002/fut.22275. 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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