Information centralization and stock price crash risk: Cross-country evidence

Our study investigates whether access to corporate disclosure via a national database affects stock price crash risk. Exploiting the staggered implementation of national databases for corporate information dissemination (Officially Appointed Mechanisms, or OAMs) in the European Union countries, we find that stock price crash risk significantly decreases after regulated information disclosed by companies is required to be compiled in OAMs. Consistent with the notion that the centralization of regulated information allows investors to search and compare corporate disclosure across peer firms, we find that the observed effect is more pronounced in firms with more peer firms in the same industry. Further analyses show that this effect is stronger in firms with less transparent information environments and with more retail investors. Collectively, our study sheds light on the role of Regtech adoption in mitigating stock price crash risk.