Ownership, Competition, and Financial Disclosure

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

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46 Citations (Scopus)
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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 - 1 Jan 2006
Externally publishedYes

Fingerprint

Ownership
Financial disclosure
Disclosure
Economic variables
Corporate governance
Intuition
Information asymmetry
Economics
Robustness test
Incentives
Political costs
Control variable
Industrial organization
Unification
Proprietary costs
Assets
Strategic management
Agency costs
Disclosure control
Inclusion

Cite this

Birt, Jacqueline L. ; Bilson, Chris M. ; Smith, Tom ; Whaley, Robert E. / Ownership, Competition, and Financial Disclosure. In: Australian Journal of Management. 2006 ; Vol. 31, No. 2. pp. 235-263.
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Ownership, Competition, and Financial Disclosure. / Birt, Jacqueline L.; Bilson, Chris M.; Smith, Tom; Whaley, Robert E.

In: Australian Journal of Management, Vol. 31, No. 2, 01.01.2006, p. 235-263.

Research output: Contribution to journalArticleResearchpeer-review

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