An examination of investors' valuation of voluntary and mandatory disclosed data on foreign operations: The case of SFAS 131

This dissertation examines how mandating a disclosure affects the investors' valuation of disclosed data. I develop hypotheses regarding how investors value voluntary disclosures and mandatory disclosures, and how mandating a disclosure changes its usefulness to investors. These hypotheses are tested empirically using U.S. multinational companies' disclosures of interim geographic segment data both before and after the adoption of SFAS 131.; The empirical results indicate that investors value interim data on foreign operations of U.S. multinational companies during both voluntary and mandatory disclosure regimes for this data. The results also provide evidence that investors find interim data on geographic segments more useful under the mandatory disclosure regime (post-adoption period of SFAS 131) than under the voluntary disclosure regime (pre-adoption period of SFAS 131).