Industry concentration and corporate disclosure policy

Ashiq Ali, Sandy Klasa and Eric Yeung

Journal of Accounting and Economics, 2014, vol. 58, issue 2, 240-264

Abstract: This study examines the association between U.S. Census industry concentration measures and the informativeness of corporate disclosure policy. We find that in more concentrated industries firms׳ management earnings forecasts are less frequent and have shorter horizons, their disclosure ratings by analysts are lower, and they have more opaque information environments, as measured by the properties of analysts׳ earnings forecasts. Also, when these firms raise funds they prefer private placements, which have minimal SEC-mandated disclosure requirements, over seasoned equity offerings. Overall, our findings suggest that firms in more concentrated industries disclose less and avoid certain financing decisions that have non-trivial disclosure implications, presumably due to proprietary costs of disclosure.

Keywords: Industry concentration; Corporate disclosures; Management forecasts; Private placements versus seasoned equity offerings; Analyst disclosure ratings; Analyst forecast properties (search for similar items in EconPapers)
JEL-codes: L1 M40 M41 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (95)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:58:y:2014:i:2:p:240-264

DOI: 10.1016/j.jacceco.2014.08.004

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