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When You Talk, I Remain Silent: Spillover Effects of Peers' Mandatory Disclosures on Firms' Voluntary Disclosures

Matthias Breuer, Katharina Hombach, Maximilian A. MüllerAccounting财务报告UTD24
The Accounting Review2021-07-20Columbia University; Carl von Ossietzky Universität Oldenburg; University of CologneDOI
Citations97

ABSTRACT We predict and find that regulated firms' mandatory disclosures crowd out unregulated firms' voluntary disclosures. Consistent with information spillovers from regulated to unregulated firms, we document that unregulated firms reduce their own disclosures in the presence of regulated firms' disclosures. We further find that unregulated firms reduce their disclosures more the greater the strength of the regulatory information spillovers. Our findings suggest that a substitutive relationship between regulated and unregulated firms' disclosures attenuates the effect of disclosure regulation on the market-wide information environment. JEL Classifications: D82; G38; K22; M41.

Spillover effectVoluntary disclosureBusinessTurnoverAccountingInformation asymmetryMonetary economicsFinanceEconomicsMicroeconomicsAuditing, Earnings Management, GovernanceFinancial Markets and Investment Strategies