The Impacts of Product Market Competition on the Quantity and Quality of Voluntary Disclosures
Temple University - Fox School of Business and Management
April 12, 2010
Review of Accounting Studies, Vol. 15, No. 3, 2010
This study examines how firms' voluntary disclosure decisions are influenced by product market competition. Using separate measures to capture different dimensions of competition, I show that competition from potential entrants increases disclosure quantity while competition from existing rivals decreases disclosure quantity. I also find that competition enhances disclosure quality mainly through reducing the optimism in profit forecasts and reducing the pessimism in investment forecasts. Moreover, I find that the above association is less pronounced for industry leaders, consistent with industry leaders facing less competitive pressures than industry followers.
Keywords: Product market, Potential competition, Existing competition, Profits, Investments, Management forecasts
JEL Classification: D4, D80, L1, M40, M41Accepted Paper Series
Date posted: September 5, 2010
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