The effect of deregulation and capital market incentives on voluntary disclosure in the electric utility industry

D.G. DeBoskey and Sara Kern

International Journal of Economics and Business Research, 2015, vol. 9, issue 2, 186-220

Abstract: There are many incentives that impact managers' disclosure decisions. This paper primarily examines one of these incentives - the capital market incentive. We offer a unique setting, the electric utility industry as it transitioned through deregulation, and we show a positive association between voluntary disclosure and deregulation in the post-regulation era. This paper also examines the consistency of four proxies used by accounting researchers to measure disclosure levels: analyst following, analyst forecast revisions, analyst forecast accuracy, and a self-constructed measure. Overall, our results provide empirical evidence that the deregulation of the electric utility industry is strongly associated with an increase in voluntary disclosure, providing additional evidence to support existing theories explaining firms' voluntary disclosure of information. We find mixed supporting evidence for the supplemental proxies. Our findings offer support to regulators that seek to justify the impact of deregulation on disclosure and capital market participants including analysts and firms.

Keywords: voluntary disclosure; capital market incentives; deregulation; electric utility industry; electricity industry; power industry; utilities industry; post regulation; disclosure levels; analyst following; analyst forecast revisions; analyst forecast accuracy; self-constructed measures. (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=67365 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:9:y:2015:i:2:p:186-220

Access Statistics for this article

More articles in International Journal of Economics and Business Research from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().