The closer the better: Supplier geographic proximity and corporate information disclosure violation

Wanli Li, Yin Lai and Yufen Zhong

The North American Journal of Economics and Finance, 2024, vol. 69, issue PA

Abstract: This study examines the association between supplier geographic proximity and corporate information disclosure violation. Using panel data with 13,775 firm-year observations of listed firms in China, we find that a supplier geographically closer to a firm (geographic proximity) can suppress the firm's information disclosure violation. This relationship is more pronounced when the supplier provides more specific investments and the firm is a non-state-owned enterprise. The main finding holds after using various measures to address endogeneity, including propensity scorematching and instrumental variable method. Overall, our research suggests the supplier's governance effect on a firm’s information disclosure strategy.

Keywords: Supplier geographic proximity; Geographic distance; Corporate information disclosure violation; Specificinvestment (search for similar items in EconPapers)
JEL-codes: D22 D91 G14 O16 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:69:y:2024:i:pa:s106294082300147x

DOI: 10.1016/j.najef.2023.102024

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