Ownership, Competition, and Financial Disclosure

Jacqueline L. Birt, Chris M. Bilson, Tom Smith and Robert E. Whaley
Additional contact information
Jacqueline L. Birt: School of Accounting and Business Information Systems, Australian National University. College of Business and Economics, Australian National University, CANBERRA ACT 0200
Chris M. Bilson: School of Finance and Applied Statistics, College of Business and Economics, Australian National University, CANBERRA ACT 0200.
Tom Smith: School of Finance and Applied Statistics, College of Business and Economics, Australian National University, CANBERRA ACT 0200.
Robert E. Whaley: Owen School of Management, Vanderbilt University, 401 21st Avenue South, Nashville TN 37203.

Australian Journal of Management, 2006, vol. 31, issue 2, 235-263

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.

Keywords: VOLUNTARY DISCLOSURES; OWNERSHIP; COMPETITION (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:31:y:2006:i:2:p:235-263

DOI: 10.1177/031289620603100204

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