Abstract
SYNOPSIS Prior studies on readability suggest that lengthy corporate reports are difficult to process and may discourage investors’ capital market participation. However, longer reports that contain additional information may actually benefit individual investors, who typically rely on public information. Using a regulatory change that requires firms to disclose additional items in the IPO prospectus, we find that the new regulation increased individual investors’ demand for IPO stocks with longer prospectuses. These results suggest that lengthy reports do not always reduce investor demand, highlighting a potential trade-off between the costs and benefits of longer corporate reports. Data Availability: All data are publicly available from the sources identified in the text. JEL Classification: G18; M41; M48.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
