Does Securities Regulation Matter? Mandatory Disclosure, Excess Stock Volatility, and the US Securities Exchange Act of 1934
研究了1934年美国证券交易法通过强制信息披露是否降低了股票过度波动，发现披露较差的公司波动下降更明显，流动性也改善更多。
We examine whether the US Securities Exchange Act of 1934 significantly stabilized the market by introducing mandatory disclosure of information. We argue that mandatory information disclosure can curb stock manipulation by enhancing transparency, thereby reducing excess stock volatility. After a comprehensive assessment of the voluntary disclosure practices of companies listed on the New York Stock Exchange before 1934, we find that those with poor disclosure practices experienced a significantly greater reduction in volatility after the implementation of the act compared with those with good disclosure practices. Further analysis reveals that the liquidity of these companies with poor disclosure practices also improved significantly more than that of companies with better disclosure, and the improvement in liquidity was linked to the decrease in their volatility. Given that one key purpose of the act’s legislators was to reduce excess market volatility, our findings provide empirical support for considering this legislative aim successful.