Does the Adoption of iXBRL Improve Data Usability? Evidence From Future Earnings Response Coefficients

ABSTRACT This paper examines how the adoption of iXBRL affects future earnings response coefficients (FERCs), which measure investors' ability to predict future performance and impound the prediction into the current‐year stock price. We find that the adoption of iXBRL is positively associated with FERCs. This finding indicates that investors can better anticipate the future performance from iXBRL filings and reflect it on the current stock price. We also find that the number of standardized and extension tags can strengthen the association between iXBRL adoption and FERCs, demonstrating the benefit of those two tags in enhancing investors' capabilities to analyze complex financial disclosures. Our findings are informative to the SEC regarding the effectiveness of the iXBRL mandate. We also contribute to the emerging literature on iXBRL adoption and the usability of iXBRL filings.This is the peer reviewed version of the following article: [Does the Adoption of iXBRL Improve Data Usability? Evidence From Future Earnings Response Coefficients. Journal of Corporate Accounting & Finance (2025)], which has been published in final form at https://doi.org/10.1002/jcaf.22791. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions: https://authorservices.wiley.com/author-resources/Journal-Authors/licensing/self-archiving.html#3. Deposited by shareyourpaper.org and openaccessbutton.org. We've taken reasonable steps to ensure this content doesn't violate copyright. However, if you think it does you can request a takedown by emailing [email protected].