Determinants of Quantitative Information Withholding in Annual Reports

Posted: 14 Jan 2009 Last revised: 10 Mar 2010

See all articles by Florence Depoers

Florence Depoers

Institut d'Administration des Entreprises de Lyon (IAE Lyon)

Thomas Jeanjean

ESSEC Business School - Department of Accounting and Management Control

Date Written: Mach 8, 2010

Abstract

In recent years, the determinants of voluntary disclosure have been explored in an extensive body of empirical research. One major limitation of those studies is that none has tried to find out whether voluntary disclosures were occasional or continuous over time. Yet this point is particularly important, as the voluntary disclosure mechanism can only be fully effective if the manager consistently reports the same items. This paper examines the factors associated with the decision to stop disclosing an item of information previously published voluntarily (henceforth “information withholding” or IW). To measure information withholding, we code 178 annual reports of French firms for three consecutive years. Although disclosure scores are relatively stable over time, we find that this does not mean there is no change in voluntary disclosure across the years. We document that IW is a widespread practice: on average, one voluntary item out of seven disclosed in a given year is withheld the following year. We show that information withholding is mainly related to the firm’s competition environment, ownership diffusion, board independence and the existence of a dual leadership structure (separate CEO and chairman).

Keywords: Voluntary Disclosure, Information Withholding, Proprietary Costs

JEL Classification: M41

Suggested Citation

Depoers, Florence and Jeanjean, Thomas, Determinants of Quantitative Information Withholding in Annual Reports (Mach 8, 2010). Available at SSRN: https://ssrn.com/abstract=1327923

Florence Depoers

Institut d'Administration des Entreprises de Lyon (IAE Lyon) ( email )

Lyon
France

Thomas Jeanjean (Contact Author)

ESSEC Business School - Department of Accounting and Management Control ( email )

Av Bernard Hirsch
Cergy-Pontoise 95021
France

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