Publication Date



Open access

Embargo Period


Degree Type


Degree Name

Doctor of Philosophy (PHD)


Accounting (Business)

Date of Defense


First Committee Member

Andrew J. Leone

Second Committee Member

Miguel Minutti-Meza

Third Committee Member

Sundaresh Ramnath

Fourth Committee Member

Indraneel Chakraborty


Trading in the Over-The-Counter (OTC) market is evolving. To facilitate order execution and help investors value and trade in OTC stocks, the OTC Markets Group (formally Pink Sheets LLC) offers an Alternative Reporting System that allows OTC firms to disclose information in ways that are similar to SEC reporting, but with less stringent requirements. I investigate the tradeoffs between reporting under the Alternative versus SEC reporting system, using unique OTC data. Specifically, I compare the trading, stock liquidity, and earnings properties of the firms reporting under these two options. I find that OTC firms following SEC reporting have higher stock liquidity than firms following the Alternative reporting. The stocks of SEC reporting firms have comparatively fewer zero-return days and experience lower bid-ask spreads and returns volatility. However, I find no differences in the earnings response coefficients and trading volumes around earnings release days for SEC and Alternative reporting firms. Finally, SEC reporting firms have higher earnings quality and are less likely to inflate their stock prices through stock promotion campaigns. Overall, these results are consistent with listed OTC firms choosing SEC reporting to signal their quality, but not necessarily having incrementally informative earnings.


This dissertation has been revised from the original document upon request of the department.

Previous version, April 24, 2018 (withdrawn).


OTC Markets; Alternative Reporting System; SEC Reporting System