Mandatory and voluntary information disclosure and the effects on financial analysts: evidence from China

Purpose – This paper aims to make a comparison, different from existing literature solely focusing on voluntary earnings forecasts and ex post earnings surprise, between the effects of mandatory earnings surprise warnings and voluntary information disclosure issued by management teams on financial analysts in terms of the number of followings and the accuracy of earnings forecasts. Design/methodology/approach – This paper uses panel data analysis with fixed effects on data collected from Chinese public firms between 2006 and 2010. It uses an exogenous regulation enforcement to minimise the endogeneity problem. Findings – This paper finds that financial analysts are less likely to follow firms which mandatorily issue earnings surprise warnings ex ante than those voluntarily issue earnings forecasts. Moreover, ex post, they issue less accurate and more dispersed forecasts on former firms. The results support Brown et al.’s (2009) finding in the USA and suggest that the earnings surprise warnings affect information asymmetries. Practical implications – This paper justifies the mandatory earnings surprise warnings policy issued by Chinese Securities Regulatory Commission in 2006. Originality/value – Mandatory earnings surprise is a unique practical regulation for publicly listed firms in China. This paper, for the first time, provides empirical evaluation on the effectiveness of a mandatory information disclosure policy in China. Consistent with existing literature on information disclosure by public firms in other countries, this paper finds that, in China, voluntary information disclosure captures more private information than mandatory information disclosure on corporate earnings ability.

The effects of acute fluoxetine administration on temporal discounting in youth with ADHD

Background Serotonin is under-researched in attention deficit hyperactivity disorder (ADHD), despite accumulating evidence for its involvement in impulsiveness and the disorder. Serotonin further modulates temporal discounting (TD), which is typically abnormal in ADHD relative to healthy subjects, underpinned by reduced fronto-striato-limbic activation. This study tested whether a single acute dose of the selective serotonin reuptake inhibitor (SSRI) fluoxetine up-regulates and normalizes reduced fronto-striato-limbic neurofunctional activation in ADHD during TD. Method Twelve boys with ADHD were scanned twice in a placebo-controlled randomized design under either fluoxetine (between 8 and 15 mg, titrated to weight) or placebo while performing an individually adjusted functional magnetic resonance imaging TD task. Twenty healthy controls were scanned once. Brain activation was compared in patients under either drug condition and compared to controls to test for normalization effects. Results Repeated-measures whole-brain analysis in patients revealed significant up-regulation with fluoxetine in a large cluster comprising right inferior frontal cortex, insula, premotor cortex and basal ganglia, which further correlated trend-wise with TD performance, which was impaired relative to controls under placebo, but normalized under fluoxetine. Fluoxetine further down-regulated default mode areas of posterior cingulate and precuneus. Comparisons between controls and patients under either drug condition revealed normalization with fluoxetine in right premotor-insular-parietal activation, which was reduced in patients under placebo. Conclusions The findings show that a serotonin agonist up-regulates activation in typical ADHD dysfunctional areas in right inferior frontal cortex, insula and striatum as well as down-regulating default mode network regions in the context of impulsivity and TD.