Hypothesis Development
In this section, we discuss the economic and technical improvements for both participating firms and investors that want to gather information about this firm.
Furthermore, we show that the introduction of eXtensible Business Reporting Language qualifies for an action of voluntary disclosure of corporate information since it makes the filing information accessible more easily.
Therefore, it serves as a signal for better corporate government
and innovation of the company.
This connects our study to a large body of literature on voluntary and non-voluntary corporate disclosure of information, for instance the introduction of accounting standards in firms.
The economic implications of voluntary disclosure have already been thoroughly analyzed in accounting literature.
Voluntary Disclosure is also playing a more vital role in Information System since the disclosure of financial information as well as the retrieval have become easier and more automated.
From the perspective of investors, Interactive Data enhances various aspects of their work with financial data. Formerly, firms submitted an html file and a pdf document of their report to the EDGAR system. An exemplary statement of income of Pepsi Co.
is shown in Fig. 1.
The introduction of Interactive Data has made it possible to find, analyze, and compare financial data of participating companies in the ‘‘Interactive Financial Report Viewer’’, as depicted in Fig. 2.
Next to the apparent new features of the new platform, the standardized format itself offers various opportunities for analysts and traders. Using the old format, analysts had to go through financial reports manually to find a specific value and copy and paste it into their spreadsheet or database.
The voluntary provision of financial reports in Interactive Data format facilitates the work of analysts since it makes financial information automatically processable and comparable.
This might play an important part in the decision of analysts whether to cover a specific stock in their analysis or not.