Voluntary Disclosure of Bad News

23 Pages Posted: 27 Mar 2006

See all articles by Jeroen Suijs

Jeroen Suijs

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE)


This paper shows that in a voluntary disclosure environment entailing both a fixed disclosure cost and a variable proprietary cost, partial disclosure equilibria may arise in which firms voluntarily disclose bad private information to the public. Furthermore, it is shown that such equilibria may arise more frequently as the threat of incuring proprietary cost increases and/or the proprietary cost itself increases.

Suggested Citation

Suijs, Jeroen, Voluntary Disclosure of Bad News. Journal of Business Finance & Accounting, Vol. 32, No. 7-8, pp. 1423-1435, September 2005, Available at SSRN: https://ssrn.com/abstract=877429 or http://dx.doi.org/10.1111/j.0306-686X.2005.00634.x

Jeroen Suijs (Contact Author)

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA

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