The Impact of Information Technology on Stock Price Crash Risk

Advances in information technology have revolutionized the dissemination and acquisition of firm-specific information, allowing investors and other stakeholders to quickly assess firm performance and value and monitor management effectively. Our research examines the impact of information technology on the ability of managers to hide and hoard bad news that, when ultimately released, results in a stock price crash.  We use the staggered implementation of the Securities and Exchange Commission’s Electronic Data Gathering Analysis and Retrieval System (EDGAR) from 1993 through 1996 as a proxy for advances in information technology. The EDGAR implementation significantly changed public access to required corporate filings, … Read more