Voluntary Disclosure Commitment and Firm Investment

55 Pages Posted: 18 Sep 2016

See all articles by Michael Imhof

Michael Imhof

Wichita State University - Barton School of Accountancy

Thomas C. Omer

University of Nebraska at Lincoln - School of Accountancy

Scott Seavey

Florida Atlantic University - School of Accounting

Date Written: February 2, 2016

Abstract

Theory suggests a commitment to voluntary disclosure may improve firm investment over time. Our findings support this argument. We document that voluntary disclosure commitment is associated with the more profitable exercise of firm investment opportunities. Additionally, prior research hypothesizes that voluntary disclosure can reduce both under- and over-investment. We document that commitment to voluntary disclosure is associated with greater investment efficiency. Results are robust to controls for accounting quality and other determinants of investment efficiency, as well as adjustments for endogeneity in the voluntary disclosure decision. Together, our findings highlight the benefits of voluntary disclosure commitment as they pertain to firm investment.

Keywords: Voluntary disclosure, firm investment, investment opportunities, investment efficiency

JEL Classification: D81, D82, G31, M41

Suggested Citation

Imhof, Michael and Omer, Thomas C. and Seavey, Scott, Voluntary Disclosure Commitment and Firm Investment (February 2, 2016). Available at SSRN: https://ssrn.com/abstract=2838894 or http://dx.doi.org/10.2139/ssrn.2838894

Michael Imhof (Contact Author)

Wichita State University - Barton School of Accountancy ( email )

United States

Thomas C. Omer

University of Nebraska at Lincoln - School of Accountancy ( email )

307 College of Business Administration
Lincoln, NE 68588-0488
United States

Scott Seavey

Florida Atlantic University - School of Accounting ( email )

University Tower
220 SE 2 Avenue
Boca Raton, FL 33431
United States

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