The effect of exogenous information on voluntary disclosure and market quality

Sivan Frenkel*, Ilan Guttman, Ilan Kremer

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

25 Scopus citations


We analyze a model in which information may be voluntarily disclosed by a firm and/or by a third party, e.g., financial analysts. Due to its strategic nature, corporate voluntary disclosure is qualitatively different from third-party disclosure. Greater analyst coverage crowds out (crowds in) corporate voluntary disclosure when analysts mostly discover information that is available (unavailable) to the firm. Nevertheless, greater analyst coverage always improves the overall quality of public information. We base this claim on two market quality measures: price efficiency, which is statistical in nature, and liquidity, which is derived in a trading stage that follows the disclosure stage.

Original languageAmerican English
Pages (from-to)176-192
Number of pages17
JournalJournal of Financial Economics
Issue number1
StatePublished - Oct 2020

Bibliographical note

Publisher Copyright:
© 2020 Elsevier B.V.


  • Analysts
  • Information disclosure
  • Liquidity
  • Price efficiency
  • Voluntary disclosure


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