Industry Concentration and Corporate Disclosure Policy
University of Texas at Dallas - Naveen Jindal School of Management
University of Arizona - Department of Finance
P. Eric Yeung
Cornell University - Samuel Curtis Johnson Graduate School of Management
May 15, 2014
Journal of Accounting & Economics (JAE), Forthcoming
This study examines the association between U.S. Census industry concentration measures and the informativeness of corporate disclosure policy. We find that in more concentrated industries firms’ management earnings forecasts are less frequent and have shorter horizons, their disclosure ratings by analysts are lower, and they have more opaque information environments, as measured by the properties of analysts’ earnings forecasts. Also, when these firms raise funds they prefer private placements, which have minimal SEC-mandated disclosure requirements, over seasoned equity offerings. Overall, our findings suggest that firms in more concentrated industries disclose less and avoid certain financing decisions that have non-trivial disclosure implications, presumably due to proprietary costs of disclosure.
Number of Pages in PDF File: 62
Keywords: Disclosure Policy, Oligopoly, Industry Concentration
JEL Classification: M41, L13, G29, G32, G34, D82
Date posted: October 24, 2010 ; Last revised: May 16, 2014
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