Ownership, Competition, and Financial Disclosure

Jacqueline L. Birt, Chris M. Bilson, Tom Smith, Robert E. Whaley

    Research output: Contribution to journalArticlepeer-review

    61 Citations (Scopus)

    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.

    Original languageEnglish
    Pages (from-to)235-263
    Number of pages29
    JournalAustralian Journal of Management
    Volume31
    Issue number2
    DOIs
    Publication statusPublished - Dec 2006

    Fingerprint

    Dive into the research topics of 'Ownership, Competition, and Financial Disclosure'. Together they form a unique fingerprint.

    Cite this