Voluntary disclosure and market competition: Theory and evidence from the U.S. services sector
Document Type
Article
Source of Publication
Research in International Business and Finance
Publication Date
1-1-2019
Abstract
© 2018 Elsevier B.V. This paper analyses a firm's incentives to disclose private information about market demand and its cost when there is a potential market entrant. A partially pooling disclosure equilibrium exists in which high demand-high cost and low demand-high cost types of firms are nontransparent in the case of risky debt issuance. I use a sample of U.S. service firms to test the theoretical predictions. Consistent with the model's implications, among low-debt service firms those that are high demand-high cost are likely to avoid information disclosure, whereas among high-debt firms those that are high demand-high cost and low demand-high cost are less likely to disclose private information.
DOI Link
ISSN
Publisher
Elsevier Ltd
Volume
47
First Page
354
Last Page
370
Disciplines
Business
Keywords
Analyst forecast, Leverage, Market competition, Voluntary disclosure
Scopus ID
Recommended Citation
Orhun, Eda, "Voluntary disclosure and market competition: Theory and evidence from the U.S. services sector" (2019). All Works. 3933.
https://zuscholars.zu.ac.ae/works/3933
Indexed in Scopus
yes
Open Access
no