Ownership, Competition, and Financial Disclosure

34 Pages Posted: 17 Jun 2006

See all articles by Chris Bilson

Chris Bilson

Australian National University (ANU) - Faculty of Economics & Commerce

Jacqueline Birt

Australian National University (ANU) - School of Business and Information Management

Tom Smith

University of Queensland - Faculty of Business, Economics and Law; Financial Research Network (FIRN)

Robert E. Whaley

Vanderbilt University - Finance

Date Written: March 9, 2006

Abstract

A firm's incentive to disclose has been linked empirically to a range of variables including information asymmetry, agency costs, political costs, and proprietary costs. While the intuition underlying each of the variables seems plausible, Verrecchia (2001) argues that disclosure models can be characterized as an eclectic mingling of highly idiosyncratic economic-based models and challenges researchers to take the first steps to unification. First, we investigate the role of ownership and competition variables in explaining voluntary segment disclosures in Australian firms and find support for both these variables. Second, drawing on theory supported by the corporate governance, strategic management and industrial organization literatures we introduce a new economic variable that unifies both ownership and competition variables. We find that the unifying variable performs better than our model focusing on ownership and competition variables alone. We conduct a series of robustness tests on the model and find that its significance is not affected by the inclusion of disclosure control variables identified in prior literature, the change in standard, and acquisitions and disposals of physical assets.

Keywords: competition, ownership, financial disclosure

JEL Classification: G11, G31

Suggested Citation

Bilson, Chris and Birt, Jacqueline and Smith, Tom M. and Whaley, Robert E., Ownership, Competition, and Financial Disclosure (March 9, 2006). Available at SSRN: https://ssrn.com/abstract=907852 or http://dx.doi.org/10.2139/ssrn.907852

Chris Bilson

Australian National University (ANU) - Faculty of Economics & Commerce ( email )

Canberra, Australian Capital Territory 2601
Australia
+61 2 6249 3664 (Phone)
+61 2 6249 5005 (Fax)

Jacqueline Birt

Australian National University (ANU) - School of Business and Information Management ( email )

Hanna Neumann Building 021
Canberra ACT 0200
Australia
+61 2 612 54857 (Phone)
+61 2 612 55005 (Fax)

Tom M. Smith

University of Queensland - Faculty of Business, Economics and Law ( email )

4072 Brisbane, Queensland
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Robert E. Whaley (Contact Author)

Vanderbilt University - Finance ( email )

401 21st Avenue South
Nashville, TN 37203
United States
615-343-7747 (Phone)
615-376-8879 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
518
Abstract Views
3,109
rank
59,150
PlumX Metrics