Product Market Competition and Managerial Disclosure of Earnings Forecasts: Evidence from Import Tariff Rate Reductions

• 成果类型: Article
• 署名作者: Huang, Ying; Jennings, Ross; Yu, Yong
• 署名单位: University of Texas System; University of Texas Austin
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-51558
• 发表日期: 2017
• 页码: 185-207
• 关键词: sfas no. 131; INTERNATIONAL-TRADE; discretionary disclosure; Information environment; voluntary disclosure; corporate governance; capital structure; firm; COSTS; POLICY

摘要

This study examines the effect of product market competition on managerial disclosure of earnings forecasts using large reductions in U.S. import tariff rates to identify an exogenous increase in competition for domestic firms in U.S. product markets. Our difference-in-differences estimations show that tariff reductions are associated with a significant decrease in management forecasts of annual earnings by U.S. domestic firms. Further, this decrease is more pronounced when the tariff rate reduction triggers a greater increase in imports and when the forecasts are likely to incur higher proprietary costs. Our findings are consistent with competition from existing rivals reducing voluntary disclosure through increased proprietary costs.