Do weaker firms disclose more?

46 Pages Posted: 6 Oct 2022 Last revised: 3 Apr 2024

See all articles by Venky Nagar

Venky Nagar

University of Michigan, Stephen M. Ross School of Business

Jordan Schoenfeld

Ohio State University (OSU)

Date Written: April 3, 2024

Abstract

The Ebert et al. (2017) disclosure model predicts that weaker firms, i.e., those that have lower operating performance, will make more disaggregated discretionary disclosures than stronger firms, a result somewhat at odds with traditional discretionary disclosure theory that predicts that stronger firms are more likely to voluntarily disclose. We use the IPO S-1 filing setting to test Ebert et al., and find that higher S-1 disaggregated discretionary disclosure quantity is significantly associated with lower operating performance. Our setting and analyses also plausibly rule out several alternative explanations.

Keywords: Corporate Disclosure, Firm Performance, IPO

JEL Classification: G30, K22, L14, M40

Suggested Citation

Nagar, Venky and Schoenfeld, Jordan, Do weaker firms disclose more? (April 3, 2024). Available at SSRN: https://ssrn.com/abstract=4223722 or http://dx.doi.org/10.2139/ssrn.4223722

Venky Nagar

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-647-3292 (Phone)
734-764-3146 (Fax)

Jordan Schoenfeld (Contact Author)

Ohio State University (OSU) ( email )

Blankenship Hall-2010
901 Woody Hayes Drive
Columbus, OH OH 43210
United States

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