Prior research examining the role of financial intermediaries in reducing the problems of information asymmetry has reported that borrowers experience a positive share price reaction to credit agreement announcements. However, it is generally acknowledged that these studies have the potential for a reporting bias because they use only one source of information for credit agreement announcements. To examine this reporting bias, we distinguish between “published” and “non-published” announcements in Australia. We find that borrowers’ share prices react positively to announcements that are published in both the financial press and by a dedicated information provider. No statistically significant reaction is observed for the non-published credit agreements.
Fery, J., Gasbarro, D., Woodliff, D., & Zumwalt, K. (2003). Market reaction to published and non-published corporate loan announcements. The Quarterly Review of Economics and Finance, 43(1), 1-10. https://doi.org/10.1016/S1062-9769(02)00118-7