How Do Firms Change Investments Based on MD&A Disclosures of Peer Firms?
成果类型：
Article
署名作者：
Cho, Hyunkwon; Muslu, Volkan
署名单位：
Sungkyunkwan University (SKKU); University of Houston System; University of Houston
刊物名称：
ACCOUNTING REVIEW
ISSN/ISSBN：
0001-4826
DOI：
10.2308/TAR-2017-0646
发表日期：
2021
页码：
177-204
关键词：
摘要：
We show that a firm's one-year-ahead capital investments and inventory increase (decrease) when peer firms' Management Discussion and Analysis (MD&A) narratives become more optimistic (pessimistic). This finding is driven by firms that access peer firms' 10-K filings within seven days of their filing date, and remains after controlling for other determinants of a firm's investments as well as economic connections between the firm and peer firms. Moreover, a firm's investment response varies based on content in peer firms' MD&A narratives. For instance, a firm makes more (less) capital investments when peer firms become more optimistic in their narratives that discuss the industry and investments (competition). Our findings provide broad insights on the information content and proprietary costs of MD&A disclosures.
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