Download or read book Voluntary Disclosure and the Role of Product Market Competition written by Narayanaswamy Ramaswami and published by . This book was released on 2001 with total page 338 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Effect of Product Market Competition on Corporate Voluntary Disclosure Decisions written by Yong-Chul Shin and published by . This book was released on 2000 with total page 196 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Impacts of Product Market Competition on the Quantity and Quality of Voluntary Disclosures written by Li, Xi and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines how firms' voluntary disclosure decisions are influenced by product market competition. Using separate measures to capture different dimensions of competition, I show that competition from potential entrants increases disclosure quantity while competition from existing rivals decreases disclosure quantity. I also find that competition enhances disclosure quality mainly through reducing the optimism in profit forecasts and reducing the pessimism in investment forecasts. Moreover, I find that the above association is less pronounced for industry leaders, consistent with industry leaders facing less competitive pressures than industry followers.

Download or read book Product Market Competition and Managerial Disclosure of Earnings Forecasts written by Ying Huang and published by . This book was released on 2016 with total page 1 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the effect of product market competition on managerial disclosure of earnings forecasts using large reductions in U.S. import tariff rates to identify an exogenous increase in competition for domestic firms in U.S. product markets. Our difference-in-difference estimations show that tariff reductions are associated with a significant decrease in management forecasts of annual earnings by U.S. domestic firms. Further, this decrease is more pronounced when the tariff rate reduction triggers a greater increase in imports and when the forecasts are likely to incur higher proprietary costs. Our findings are consistent with competition from existing rivals reducing voluntary disclosure through increased proprietary costs.

Download or read book The Effect of Product Market Competition on Mandatory Disclosure Strategy written by Hanyong Chung and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines how product market competition affects firms' mandatory disclosure strategies. Using the information in the SEC comment letters, I observe that firms in a highly competitive market are more likely to file unaudited mandatory disclosures with deficiency. I also find that firms facing higher competition from potential entrants tend to bundle positive (negative) mandatory items with the negative (positive) management earnings forecasts. These findings support my conjecture that firms exercise discretion in the mandatory disclosure through less transparent ways, due to a proprietary cost resulting from market competition. Additional analyses demonstrate a positive economic consequence of such disclosure strategy, and the relationship between market competition and mandatory disclosure strategies is stronger for industry followers than for industry leaders.

Download or read book Voluntary Disclosure Under Imperfect Competition written by Lucy F. Ackert and published by . This book was released on 1998 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Corporate Competitive Strategy and Voluntary Disclosure written by Jidong Zhang and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The relation between the motivation of voluntary disclosure and the characters of companies is important research topic in accounting research and strategy research. The paper investigates the samples from Chinese capital market during 2004-2006 and concludes some empirical results to verify and support the strategy theory that pre-literatures had document through the analysis of game theory. The findings are that there is no significant relationship between industry competitive information voluntary disclosure and corporate governance and there is no significant relationship between industry competitive information voluntary disclosure and earning quality. As the analysis of strategy theory, there is significant relationship between industry competitive information voluntary disclosure and corporate competitive strategy which integrates with the status of market competitive where the corporate locates. If the corporate locates in growth period of Product Life Cycle (PLC), it is more possible to disclose industry competitive information and this motivation is obvious. The findings provide the empirical evidence of strategy competitive theory. These also implicate that voluntary disclosure is related to the disclosure content, not to corporate characters such as governance and earning quality.

Download or read book Quality Disclosure and Comparative Advertisement written by Yeolyong Sung and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study firms' voluntary disclosure in an oligopoly market for vertically differentiated products, where firms are allowed to advertise a rival's product as well as their own products. When consumers are uncertain of product qualities, Board (2009)1) and Hotz and Xiao (2011)2) show that price competition among firms alleviates firms' incentives to disclose the quality of their own product. Nonetheless, firms still have incentives to distinguish their own products from those of the competitors to attract more consumers. A comparative advertisement is a useful way to distinguish products and thus, a rival's advertisement can lead to a disclosure of a firm's product information. Comparative or negative advertisements are used in many industries and political campaigns. In 2010, for example in the United States, Verizon Wireless compared their service coverage with that of the competitor, AT&T, on the TV commercial and their Web site in order to advertise the 3G network service for mobile phones (See Figure 1). They had a broader service area than AT&T did and used a comparative advertisement to show that their service was superior.3) Through the negative advertisement by Verizon Wireless on the AT&T's service, the information on the AT&T's mobile phone service was revealed even though AT&T did not disclose their nation-wide service coverage in a picture. This is in contrast with the fact that AT&T themselves put the map showing their nation-wide 3G service coverage for iPads on their Web site.4) At that time AT&T was the only service provider for iPads. This paper allows firms to advertise a rival's product. We show that the qualities of all the products in an industry are fully revealed by a high quality firm's comparative advertisement and full revelation is the unique equilibrium outcome. Each firm's advertisement (message) can convey information on either its own product quality or a rival's or both. Differentiating from traditional models that consider advertisement as a signal of product qualities (Nelson, 19745); Schmalensee, 19786); Grossman and Shapiro, 19847); Kihlstrom and Riordan, 19848)), we consider it as a truthful claim about its qualities. In other words, we see the role of advertisement as conveying factual information directly to the consumers. The restriction of firms' messages to truthful claims can be justified by the argument that an untruthful claim, such as an overstatement on their own product or an understatement on their rival's product, could be challenged in a court of law. If the claim was found to be untruthful, the firm that sent the untrue message might have to pay a fine or more, and the true quality would be revealed as the result. In this model, full revelation occurs as the unique equilibrium outcome. If firms do not disclose any information and consumers do not distinguish the qualities among products, then the firms' profits are zero by price competition. By revealing some information and having consumers perceive that the product is differentiated from its rivals', a firm can increase the profit. In the competition between two firms, there exists an equilibrium in which full information on all products is revealed by the firm with a higher quality (henceforth, called a high quality firm) as in the above example of the mobile phone service industry. The high quality firm can increase the profit by advertising the rival's low quality product as negatively as possible because such an advertisement increases its demand by making more consumers switch from the low quality product to the high quality product. Since false claims are not allowed, the negative advertisements reveal the true quality of the rival's product. Meanwhile, the high quality firm reveals the true quality of its own product building grounds for a higher price. Since an advertisement that fully reveals both firms' product qualities is a dominant strategy for the high quality firm, full revelation is the unique outcome. In general, full revelation fails without advertisement on a rival's product. Such revelation, as many studies suggest, increases consumers' welfare, and thus the literature argues in favor of the introduction of mandatory disclosure laws (Fishman and Hagerty, 20039); Board, 2009; Hotz and Xiao, 2011). However, mandatory disclosure laws burden both private and public sectors with an enforcement cost and a deadweight loss. As an alternative to the costly legal solution, the results of this paper suggest that a market can lead to a full revelation with voluntary disclosure if negative advertisement on rivals' products is allowed. As a parallel example, in the domain of politics, negative advertisement exists in the form of negative campaigning. Amid ongoing debate and controversy, recent studies such as Polborn and Yi (2006)10) defend prevailing negative campaigning arguing that consequently revealed information on the candidates empowers the electorate to make more-informed decisions. The rest of the paper is organized as follows. After reviewing the related literature in Section 2, we present an oligopoly model with price competition between two firms in Section 3 and derive the firms' profit functions from the equilibrium pricing rules and the associated demand functions in Section 4. With the profit functions, in Section 5, we analyze the firms' advertisement strategies and show that there exists an equilibrium in which full information is revealed by the high quality firm. Section 6 concludes the findings and discusses extendible issues.

Download or read book Information Disclosure Product Market Competition and Firm Value written by Kung-Cheng Ho and published by . This book was released on 2016 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the relationship between information disclosures and firm value under different levels of product market competition. Using a unique information rating scheme that draws from 114 measures over five dimensions of information disclosure from 2005 to 2013, we find that firms with higher levels of information disclosure (better information transparency) are related to higher industry-adjusted Tobin's Q. We also find that the levels of information disclosure and product market competition interact in affecting firm value. This relationship is robust after controlling for a number of firm-specific factors and agency-based measures. Our paper brings two streams of research that aim to explain the variation in firms' value together, and suggests that information disclosure and product market competition complement each other in enhancing a firm's value.

Download or read book Dynamic Voluntary Disclosure with Endogenous Proprietary Costs written by Jeremy Bertomeu and published by . This book was released on 2020 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores corporate disclosure in a dynamic oligopoly setting. In each period, a firm receives a signal on market size and must decide whether or not to publicly disclose the information before engaging in price competition in the product market. The main insight here is that firms' disclosure choices can be used strategically to sustain higher, collusive pricing choices on the product market. Specifically, two main forces in play are (1) no-disclosure makes it easier for the oligopoly to sustain higher prices because the uninformed firms are uncertain about the market size (and therefore the benefit of deviating from collusion is lower than otherwise); and (2) disclosure makes it easier to coordinate prices if and when the oligopoly wishes to condition equilibrium prices on the market size. We find that, when firms are sufficiently patient such that monopoly prices can be sustained as an equilibrium, no-disclosure is (weakly) preferable to any other disclosure policy. Otherwise and in contrast to the static model, a simple form of partial disclosure can be optimal: the informed firm does not disclose when market size is either too high or too low but discloses for intermediate market sizes.

Download or read book Competition and Voluntary Disclosure of Quality Information written by Zhe Jin and published by . This book was released on 2000 with total page 404 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Voluntary Disclosure in a Multi Audience Setting written by Sanjeev Bhojraj and published by . This book was released on 2014 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate the issue of voluntary disclosure in multi-audience settings by focusing on the electric utility industry as it transitions toward deregulation. We consider three target audiences: industry regulators, capital market participants, and product market competitors. As predicted, we find that utilities tend to disclose less strategic information in jurisdictions where the stranded cost recovery issue is unresolved, consistent with incentives to appear quot;weakquot; to regulators. Further, we find that utilities whose viability in a deregulated environment is more uncertain tend to provide more disclosures, unless they face greater threat from competitors. These results are consistent with prior theoretical research on conflicting disclosure incentives to capital markets versus product markets.Key Words: Voluntary disclosure; Electric utilities; Deregulation.

Download or read book Product Use Information and the Limits of Voluntary Disclosure written by Oren Bar-Gill and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Concern about asymmetric information in markets for consumer goods and services has focused on product attribute information. We highlight the importance of another category of information - product use information. In important markets, sellers have better information about how a consumer will use their product or service than the consumer herself. Moreover, we show that the classic unraveling results do not extend to product use information, and thus sellers are less likely to voluntarily disclose this type of information. Our findings have important policy implications: While most disclosure mandates target product attribute information, our analysis suggests that mandating disclosure of product use information may be more important. Indeed, policymakers are beginning to recognize the importance of product use disclosures.

Download or read book Limits to Voluntary Disclosure in Efficient Markets written by Bharat Sarath and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In competitive markets, prices offered by investors play a dual role: they must induce the firm to make truthful disclosures about its expected cash flows and they must also be efficient, i.e., equal the expected future cash flows to the buyer conditional on the disclosed information. We show that these requirements may exert opposing influences resulting in equilibrium disclosures being partial; that is, they might cause firms to reveal some, but not all of the valuation relevant information possessed by the firm. We then characterize the maximal level of information that can be elicited through efficient prices. We apply our analysis to the study of voluntary disclosures in the context of equity offerings, leases and sale of tax-loss carry-forwards and compare these to the level of currently mandated disclosures under GAAP.

Download or read book Voluntary Disclosure of Product Information written by Dainis Zegners and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: An important question in markets with asymmetric information is why in practice fewer sellers voluntarily disclose their private information than theory would predict. To better understand this discrepancy, I use data from an online self-publishing platform to examine the empirical relationship between pricing and voluntary disclosure. On this platform, I observe whether authors disclose characteristics of their e-books by offering free samples. In contrast to the prediction of theories of unraveling, I show that for e-books without a posted online rating, indicating that their quality is unknown to the market, offering a sample is associated with a lower price. I also show that for unrated e-books, fewer authors offer a sample while simultaneously setting a higher price than authors of rated e-books. These results can be explained by incorporating into a model a fraction of naive buyers who do not update their beliefs upon observing that a seller does not disclose. This gives low-quality sellers an incentive to conceal their quality by not disclosing and to set high prices to exploit naive buyers.

Download or read book The Spillover Effects of MD A Disclosures for Real Investment written by Art Durnev and published by . This book was released on 2015 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: We explore the association between a company's investments and the tone of its peers' MD&A disclosures; we ask whether the direction and the strength of this association is affected by product market competition. We find that the direction of the association can differ according to whether investing companies and disclosing peers in a product market have positive or negative interdependencies. Moreover, we document that the strength of the association between a company's investments and the tone of its peers' MD&A disclosures varies with product market fundamentals: the association is stronger when entry costs are lower, the product market is larger and products are less substitutable. Finally, we show that our results regarding investments generally carry over to investment efficiency.

Download or read book Voluntary Disclosure and Corporate Innovation written by Sheng-Syan Chen and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine whether a firm's voluntary disclosures, proxied by management earnings forecasts, affect its innovation activity. A firm making more disclosures generates fewer patents and lower-quantity patents. Enactment of SOX is applied as a natural experiment for an exogenous shock to voluntary disclosure. Corporate innovation is reduced for accelerated filers, especially after SOX becomes effective. Nondedicated institutional ownership, R&D spillover, and rival firms' innovation are higher for accelerated filers after SOX. There is more of a negative effect of voluntary disclosure on innovation activity when product markets are highly competitive, industry information diffusion is speedy, and disclosures are more informative.