Firm Boundaries and Voluntary Disclosure

51 Pages Posted: 30 Jan 2022 Last revised: 11 Apr 2023

See all articles by Thomas Bourveau

Thomas Bourveau

Columbia University - Columbia Business School, Accounting, Business Law & Taxation

John D. Kepler

Stanford Graduate School of Business

Guoman She

The University of Hong Kong - Faculty of Business and Economics

Lynn Linghuan Wang

The University of Hong Kong - Faculty of Business and Economics

Date Written: January 30, 2023

Abstract

We study how vertical firm boundaries shape firms' public disclosures. Theory suggests that firms can use public disclosure to coordinate with supply chain partners, and predicts a substitutive relation between vertical integration and public disclosure about future strategic plans, as vertical integration reduces the need to coordinate via public disclosure. Using data on the extent to which firms are vertically integrated, we find that firms that become more vertically integrated reduce their public disclosure about their product strategies, and that the reduction is most pronounced for vertically integrating firms with the largest informational and strategic frictions along the supply chain.

Keywords: Firm Boundaries, Vertical Integration, Product Disclosure, Coordination Role of Disclosure

JEL Classification: D83, G14, L14, M41

Suggested Citation

Bourveau, Thomas and Kepler, John and She, Guoman and Wang, Lynn Linghuan, Firm Boundaries and Voluntary Disclosure (January 30, 2023). Columbia Business School Research Paper , Available at SSRN: https://ssrn.com/abstract=4019607 or http://dx.doi.org/10.2139/ssrn.4019607

Thomas Bourveau

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

3022 Broadway
New York, NY 10027
United States

John Kepler (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Guoman She

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

Pokfulam Road
Hong Kong
China

Lynn Linghuan Wang

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

Pokfulam Road
Hong Kong, Pokfulam HK
Hong Kong

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
800
Abstract Views
2,602
Rank
52,084
PlumX Metrics