Disclosure incentives when competing firms have common ownership

• 成果类型: Article
• 署名作者: Park, Jihwon; Sani, Jalal; Shroff, Nemit; White, Hal
• 署名单位: Harvard University; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2019.02.001
• 发表日期: 2019
• 关键词: product-market competition; institutional investors; CORPORATE DISCLOSURE; management forecasts; Information environment; PROPRIETARY INFORMATION; private meetings; cross-ownership; earnings; governance

摘要

This paper examines whether common ownership - i.e., instances where investors simultaneously own significant stakes in competing firms - affects voluntary disclosure. We argue that common ownership (i) reduces proprietary cost concerns of disclosure, and (ii) incentivizes firms to internalize the externality benefits of their disclosure for co-owned peer firms. Accordingly, we find a positive relation between common ownership and disclosure. Evidence from cross-sectional tests and a quasi-natural experiment based on financial institution mergers help mitigate concerns that our results are explained by an omitted variable bias or reverse causality. Finally, we find that common ownership is associated with increased market liquidity. (C) 2019 Elsevier B.V. All rights reserved.