TY - JOUR AU - Greenstone,Michael AU - Oyer,Paul AU - Vissing-Jorgensen,Annette TI - Mandated Disclosure, Stock Returns, and the 1964 Securities Acts Amendments JF - National Bureau of Economic Research Working Paper Series VL - No. 11478 PY - 2005 Y2 - July 2005 UR - http://www.nber.org/papers/w11478 L1 - http://www.nber.org/papers/w11478.pdf N1 - Author contact info: Michael Greenstone MIT Department of Economics 50 Memorial Drive, E52-359 Cambridge, MA 02142-1347 Tel: 617/452-4127 Fax: 617/253-1330 E-Mail: mgreenst@mit.edu Paul Oyer Graduate School of Business Stanford University 518 Memorial Way Stanford, CA 94305-5015 Tel: 650/736-1047 Fax: 650/725-0468 E-Mail: pauloyer@stanford.edu Annette Vissing-Jorgensen Finance Department Kellogg School of Management Northwestern University 2001 Sheridan Road Evanston, IL 60208-2001 Tel: 847/467-6171 Fax: 847/491-5719 E-Mail: a-vissing@northwestern.edu AB - The 1964 Securities Acts Amendments extended the mandatory disclosure requirements that had applied to listed firms since 1934 to large firms traded Over-the-Counter (OTC). We find several pieces of evidence indicating that investors valued these disclosure requirements, two of which are particularly striking. First, a firm-level event study reveals that OTC firms most impacted by the 1964 Amendments had abnormal excess returns of about 3.5 percent in the weeks immediately surrounding the announcement that they had begun to comply with the new requirements. Second, we estimate that the most affected OTC firms had abnormal excess returns ranging between 11.5 and 22.1 percent in the period between when the legislation was initially proposed and when it went it went into force, relative to unaffected listed firms and after adjustment for the standard four-factor model. While we cannot determine how much of shareholders' gains were a transfer from insiders of these same companies, our results suggest that mandatory disclosure causes managers to more narrowly focus on the maximization of shareholder value. ER -