Advertising rivalry and discretionary disclosure

• 成果类型: Article
• 署名作者: Liang, Chuchu
• 署名单位: University of California System; University of California Irvine
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2023.101611
• 发表日期: 2024
• 关键词: voluntary disclosure; life-cycle; CORPORATE DISCLOSURE; COMPETITION; MARKET; PROPRIETARY; INFORMATION; performance; MATERIALITY; earnings

摘要

Advertising is a critical competitive tool that shapes interactions among firms in the product market. Using third-party tracked data on advertising outlet costs, I find that a nontrivial portion of public firms, even those with intense advertising activities, do not disclose advertising expenses in their financial statements, indicating significant disclosure discretion. I further use product category-level advertising data to develop a firm-specific measure of advertising rivalry. I predict and find that advertising rivalry is negatively associated with the likelihood of disclosing advertising expenses. This negative association is more pronounced when firms advertise on less trackable media outlets or have more mature products. These findings suggest that firms consider their advertising expenses proprietary and that concerns about advertising competition discourage the disclosure of advertising expenses. (c) 2023 The Author. Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).