Proprietary Costs and the Disclosure of Information About Customers
Jesse A. Ellis
North Carolina State University
C. Edward Fee
Michigan State University - Department of Finance
Shawn E. Thomas
University of Pittsburgh - Finance Group
November 2, 2011
Journal of Accounting Research, Forthcoming
In deciding how much information about their firms’ customers to disclose, managers face a trade-off between the benefits of reducing information asymmetry with capital market participants and the costs of aiding competitors by revealing proprietary information. This paper investigates the determinants of managers’ choices to disclose information about their firms’ customers using a comprehensive dataset of customer-information disclosures over the period 1976-2006. We find robust evidence in support of the hypothesis that proprietary costs are an important factor in firms’ disclosure choices regarding information about large customers.
Number of Pages in PDF File: 63
Keywords: Proprietary Costs, Disclosure, Customers, Competition
JEL Classification: M41, L14
Date posted: January 27, 2012
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