공정공시제도의 시행효과 및 공정공시제도를 통한 정보 제공 여부와 관련된 기업특성에 관한 연구

On 1 November 2002, Regulation Fair Disclosure(FD) became effective. It requires companies to disclosure material nonpublic information to all investors. Regulation FD prohibits selective disclosure of material information and is intended to “level the playing fields” by reducing information disparities among market participants. Regulation FD impacts the way that firms disclosure information and analysts forecast. Analysts will forecast the company’s outcome of operation with public disclosures in the post-FD period. This paper examines how Regulation FD affects analyst forecast and firm disclosure. We compare analyst forecast bias before and after implementation of Regulation FD for examining the effect of Regulation FD. Also we compare analyst forecast error and analyst forecast dispersion before and after implementation of Regulation FD, in addition to comparing analyst forecast error and analyst forecast dispersion for FD firms and non-FD firms. Incentives of the firm associated with the decision to provide information through FD are also examined. We investigate the companies where the same analyst forecasts their income in the same month before and after implementation of Regulation FD. Our evidence suggests that an analyst forecast bias decreases in the post-FD period. The decrease of analyst forecast bias is consistent with prohibiting selective disclosure of material information to privileged individuals. Based on the time-series evidence, an analyst forecast error and an analyst forecast dispersion decreases in the post-FD. Based on cross-sectional evidence, firms which issue FD information show lower analyst forecast error and dispersion than firms that don’t issue FD information. Hence, the effect of Regulation FD is shown to be effective. A few firm characteristics are associated with the decision to issue FD information: percentage of foreign investors, need to attract new capital and volatility of EPS. Evidence of empirical test indicates that Regulation FD seems to prohibit selective disclosure of material information to privileged individuals. If firms issue FD information, information asymmetry decreases. Considering the fact that enforcement of Regulation FD leaves the voluntary choice to the firm and the firm which doesn’t issue FD information doesn’t decrease information asymmetry, we claim that Regulation FD needs correction. The valuable attempt of this research will be regarded as the very first empirical analysis of the firm characteristics related with enforcement of Regulation FD in Korea.