Title

Voluntary disclosure and market competition: Theory and evidence from the U.S. services sector

Author First name, Last name, Institution

Eda Orhun, Zayed University

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.

ISSN

0275-5319

Publisher

Elsevier Ltd

Volume

47

First Page

354

Last Page

370

Disciplines

Business

Keywords

Analyst forecast, Leverage, Market competition, Voluntary disclosure

Scopus ID

85052846002

Indexed in Scopus

yes

Open Access

no

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