My initial sample comprises firms that are listed in the 1995 Fortune 500 survey.
Financial institutions (Standard Industrial Classification ¡SICl codes 6000-6999)
and utilities {SIC codes 4900-4999) are deleted from the sample, because their
special regulatory environment is likely to influence the role of financial reporting
systems in the corporate govemance process. Also deleted are firms with no electronic
filings with the Securities and Exchange Commission (SEC) between 1994
and 2000, firms for which COMPUSTAT provides insufficient financial data for
1995, and foreign firms. This leaves a final sample of 252 firms.
I extend the sample period one year before 1995 and five years