Corporate Disclosure as a Tacit Coordination Mechanism: Evidence from Cartel Enforcement Regulations

89 Pages Posted: 20 Apr 2017 Last revised: 11 Feb 2020

See all articles by Thomas Bourveau

Thomas Bourveau

Columbia Business School - Accounting, Business Law & Taxation

Guoman She

The University of Hong Kong - Faculty of Business and Economics

Alminas Zaldokas

Hong Kong University of Science & Technology (HKUST) - Department of Finance

Multiple version iconThere are 2 versions of this paper

Date Written: April 1, 2019

Abstract

We empirically study how collusion in product markets affects firms’ financial disclosure strategies. We find that after a rise in cartel enforcement, U.S. firms start sharing more detailed information in their financial disclosure about their customers, contracts, and products. This new information potentially benefits peers by helping to tacitly coordinate actions in product markets. Indeed, changes in disclosure are associated with higher future profitability. Our results highlight the potential conflict between securities and antitrust regulations.

Keywords: Financial Disclosure, Antitrust Enforcement, Collusion, Tacit Coordination

JEL Classification: D43, G38, M41, L15, L41

Suggested Citation

Bourveau, Thomas and She, Guoman and Zaldokas, Alminas, Corporate Disclosure as a Tacit Coordination Mechanism: Evidence from Cartel Enforcement Regulations (April 1, 2019). Sixth Annual Conference on Financial Market Regulation, Available at SSRN: https://ssrn.com/abstract=2954382 or http://dx.doi.org/10.2139/ssrn.2954382

Thomas Bourveau

Columbia Business School - Accounting, Business Law & Taxation ( email )

3022 Broadway
New York, NY 10027
United States

Guoman She

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Alminas Zaldokas (Contact Author)

Hong Kong University of Science & Technology (HKUST) - Department of Finance ( email )

Clear Water Bay, Kowloon
Hong Kong

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