Continuous disclosure and information asymmetry

Purpose-This paper aims to examine whether firms with high information asymmetry disclose more information under a continuous disclosure regime, and, second, the paper examines whether continuous disclosures reduce information asymmetry. Design/methodology/approach-The study models relations between continuous disclosures and information asymmetry using ordinary least squares regression and two-stage least squares regression. Findings-The study finds firms with high information asymmetry disclose more information. Further, the study finds that disclosure in the presence of high information asymmetry increases asymmetry. Finally, while bad news increases information asymmetry, the disclosure of firm-specific good and bad news is associated with reduced information asymmetry. Originality/value-The paper identifies conditions under which Continuous Disclosure Regime increases information in markets and influences information asymmetry