Industry concentration and corporate disclosure policy

Ashiq Ali, Sandy J Klasa, Eric Yeung

Research output: Contribution to journalArticle

80 Citations (Scopus)

Abstract

This study examines the association between U.S. Census industry concentration measures and the informativeness of corporate disclosure policy. We find that in more concentrated industries firms[U+05F3] management earnings forecasts are less frequent and have shorter horizons, their disclosure ratings by analysts are lower, and they have more opaque information environments, as measured by the properties of analysts[U+05F3] earnings forecasts. Also, when these firms raise funds they prefer private placements, which have minimal SEC-mandated disclosure requirements, over seasoned equity offerings. Overall, our findings suggest that firms in more concentrated industries disclose less and avoid certain financing decisions that have non-trivial disclosure implications, presumably due to proprietary costs of disclosure. Firms in more concentrated industries tend to disclose less.These firms have more opaque information environments. The above findings are more pronounced in less financially leveraged industries.Proprietary costs of disclosure presumably lead to the study[U+05F3]s findings.

Original languageEnglish (US)
Pages (from-to)240-264
Number of pages25
JournalJournal of Accounting and Economics
Volume58
Issue number2-3
DOIs
StatePublished - Nov 1 2014

Fingerprint

Corporate disclosure
Disclosure policy
Industry concentration
Disclosure
Industry
Information environment
Proprietary costs
Analysts
Seasoned equity offerings
Management earnings forecasts
Rating
Private placement
Earnings forecasts
Census
Informativeness
Disclosure requirements
Financing decisions

Keywords

  • Analyst disclosure ratings
  • Analyst forecast properties
  • Corporate disclosures
  • Industry concentration
  • L1
  • M40
  • M41
  • Management forecasts
  • Private placements versus seasoned equity offerings

ASJC Scopus subject areas

  • Accounting
  • Economics and Econometrics
  • Finance

Cite this

Industry concentration and corporate disclosure policy. / Ali, Ashiq; Klasa, Sandy J; Yeung, Eric.

In: Journal of Accounting and Economics, Vol. 58, No. 2-3, 01.11.2014, p. 240-264.

Research output: Contribution to journalArticle

Ali, Ashiq ; Klasa, Sandy J ; Yeung, Eric. / Industry concentration and corporate disclosure policy. In: Journal of Accounting and Economics. 2014 ; Vol. 58, No. 2-3. pp. 240-264.
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