RT Journal Article
SR Electronic
T1 Financial Disclosure and Regulation
JF The Journal of Portfolio Management
FD Institutional Investor Journals
SP 107
OP 115
DO 10.3905/jpm.2006.611811
VO 32
IS 2
A1 Moshe Levy
A1 Golan Benita
A1 Haim Levy
YR 2006
UL https://pm-research.com/content/32/2/107.abstract
AB A portfolio approach is used here to analyze the value of financial disclosure to stockholders and the need for disclosure regulation. This demonstrates that in a portfolio context the degree of public financial disclosure does not influence a firm's value. Hence, if disclosure is costly, firms have no incentive to disclose information voluntarily. Under partial disclosure, however, investors select inefficient portfolios, implying a substantial welfare loss; hence, we need regulation. The analysis provides a framework for determining optimal disclosure from the point of view of social welfare.TOPICS: Portfolio construction, legal/regulatory/public policy, in portfolio management