Effects of 10-K readability on institutional blockholder monitoring of risk management
- Authors
- Kim, Daniel Sungyeon; Chung, Chune Young; Fard, Amirhossein
- Issue Date
- Oct-2023
- Publisher
- ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
- Keywords
- 10-K report readability; institutional monitoring; risk management; plain writing act
- Citation
- APPLIED ECONOMICS LETTERS, v.30, no.18, pp 2657 - 2666
- Pages
- 10
- Journal Title
- APPLIED ECONOMICS LETTERS
- Volume
- 30
- Number
- 18
- Start Page
- 2657
- End Page
- 2666
- URI
- https://scholarworks.bwise.kr/cau/handle/2019.sw.cau/58534
- DOI
- 10.1080/13504851.2022.2103075
- ISSN
- 1350-4851
1466-4291
- Abstract
- Using the Plain Writing Act (PWA) of October 2010 as a source of exogenous variation in 10-K readability, we examine whether improvements in 10-K reports enhance institutional investors' monitoring of firm risk management. The results indicate that the negative association between monitoring institutional ownership and systematic risk is stronger when firms provide more readable 10-K reports. The impact of readability improvement on the relation between institutional monitoring and risk is more pronounced after the PWA. This finding confirms our hypothesis that improved readability provides institutional investors with more complete firm information with which to conduct their monitoring efforts, thus inducing more effective risk management.
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Collections - College of Business & Economics > School of Business Administration > 1. Journal Articles
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