File Download
There are no files associated with this item.
Links for fulltext
(May Require Subscription)
- Publisher Website: 10.1287/mnsc.2022.4660
- WOS: WOS:000963293300001
Supplementary
-
Citations:
- Web of Science: 0
- Appears in Collections:
Article: RegTech Adoption and the Cost of Capital
Title | RegTech Adoption and the Cost of Capital |
---|---|
Authors | |
Issue Date | 2023 |
Citation | Management Science, 2023, Forthcoming How to Cite? |
Abstract | This paper studies the cost of capital effect of a major regulatory technology, or RegTech, event: the staggered implementation of the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system of the Securities and Exchange Commission in the period from 1993 to 1996. This event represents a largely exogenous shock to corporate informa-tion dissemination technologies, resulting in a considerable reduction in information acqui-sition costs for investors. Using a difference-in-differences research design, we show that the cost of equity capital declines substantially after a firm switches from paper filing to mandatory electronic filing in EDGAR. The effect is stronger for small firms and firms with low analyst coverage and low institutional ownership. We identify three channels through which EDGAR affects a firm’s cost of capital: the liquidity, risk-taking, and corporate gov-ernance channels. EDGAR implementation also improves a firm’s investment efficiency significantly. We find evidence that the marginal value of a firm’s capital investment and cash is higher during the post-EDGAR period. |
Persistent Identifier | http://hdl.handle.net/10722/324734 |
ISI Accession Number ID |
DC Field | Value | Language |
---|---|---|
dc.contributor.author | Lai, S | - |
dc.contributor.author | Lin, C | - |
dc.contributor.author | Ma, X | - |
dc.date.accessioned | 2023-02-20T01:36:10Z | - |
dc.date.available | 2023-02-20T01:36:10Z | - |
dc.date.issued | 2023 | - |
dc.identifier.citation | Management Science, 2023, Forthcoming | - |
dc.identifier.uri | http://hdl.handle.net/10722/324734 | - |
dc.description.abstract | This paper studies the cost of capital effect of a major regulatory technology, or RegTech, event: the staggered implementation of the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system of the Securities and Exchange Commission in the period from 1993 to 1996. This event represents a largely exogenous shock to corporate informa-tion dissemination technologies, resulting in a considerable reduction in information acqui-sition costs for investors. Using a difference-in-differences research design, we show that the cost of equity capital declines substantially after a firm switches from paper filing to mandatory electronic filing in EDGAR. The effect is stronger for small firms and firms with low analyst coverage and low institutional ownership. We identify three channels through which EDGAR affects a firm’s cost of capital: the liquidity, risk-taking, and corporate gov-ernance channels. EDGAR implementation also improves a firm’s investment efficiency significantly. We find evidence that the marginal value of a firm’s capital investment and cash is higher during the post-EDGAR period. | - |
dc.language | eng | - |
dc.relation.ispartof | Management Science | - |
dc.title | RegTech Adoption and the Cost of Capital | - |
dc.type | Article | - |
dc.identifier.email | Lin, C: chenlin1@hku.hk | - |
dc.identifier.authority | Lin, C=rp01808 | - |
dc.identifier.doi | 10.1287/mnsc.2022.4660 | - |
dc.identifier.hkuros | 343640 | - |
dc.identifier.volume | Forthcoming | - |
dc.identifier.isi | WOS:000963293300001 | - |