Interactive Discretionary Disclosures*

Jørgensen, Bjørn N.; Kirschenheiter, Michael

doi:10.1111/j.1911-3846.2011.01070.x

Cited by 35 publications

(25 citation statements)

References 22 publications

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“…On one hand, if discretionary disclosure is costly and information transfer from peer discretionary disclosures is perfect, the underlying firm may incur positive information externality from peer discretionary disclosures (Jorgensen and Kirschenheiter 2012). The underlying firm may thus potentially benefit from free-riding on the discretionary disclosures of peer firms and save on the disclosure cost.…”

Section: Frequency Of Discretionary Disclosurementioning

confidence: 99%

“…While positive correlation in information arrival processes generally predicts a lower disclosure threshold (Dye and Sridhar 1995), positive correlation in information signals may predict a higher disclosure threshold for the follower due to the possibility of information free-riding if disclosure is costly (Jorgensen and Kirschenheiter 2012).…”

Section: Panel B: Difference-in-difference With Matched Firms As Contmentioning

confidence: 99%

“…Dye 1985, Jung andKwon 1988). The two most closely related papers using a multi-firm setting include Dye and Sridhar (1995) and Jorgensen and Kirschenheiter (2012). Dye and Sridhar (1995) generally predicts "herding" behavior in discretionary disclosure as long as there is positive correlation among firms' receipt of information.…”

Section: Panel B: Difference-in-difference With Matched Firms As Contmentioning

confidence: 99%

“…Dye 1985, Jung andKwon 1988). The two most closely related theoretical papers using a multi-firm setting include Dye and Sridhar (1995) and Jorgensen and Kirschenheiter (2012).…”

Section: Related Literaturementioning

confidence: 99%

“…In Jorgensen and Kirschenheiter (2012), the model assumes that the private signals are correlated with an exogenous leader and follower. Jorgensen and Kirschenheiter (2012) predict a higher disclosure threshold by the follower due to information freeriding if the signals are positively correlated and a lower disclosure threshold by the follower due to negative information externality if the signals are negatively correlated.…”

mentioning

confidence: 99%

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Informational Uniqueness, Corporate Disclosure, and Information Environment

Chau

2016

SSRN Journal

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This dissertation examines how the lack of comparable public peers ("informational uniqueness") is related to a firm's disclosure policy and information environment.Having less information spillover from other public firms may present an information deficiency if it is not compensated by other components of the information environment. Using textual similarity in business description among firms to measure the extent of peer presence, I find that informational uniqueness is associated with a higher propensity by firms to provide ongoing bundled guidance. This is consistent with firms attempting to mitigate the information deficiency through strengthening their tacit commitment to continued disclosure by providing more information regularly on predictable schedules. Overall, I find a strong negative relationship between informational uniqueness and the quality of corporate information environment only among firms without regular bundled guidance. My results suggest that, while informational uniqueness can generate significant information deficiency, firms with strong tacit commitment to ongoing disclosure are largely able to compensate for the lack of information spillover from peers.On the flip side, firms surrounded by many peers may be subject to the influence of peer dynamics on their disclosure behavior. While the presence of comparable public peers likely expands investors' information endowment on the base firm through information spillover on related exposures, discretionary disclosures by peer firms may also signal information arrival. This can raise investors' inferred probability that non-disclosure is due to strategic information withholding rather than the absence of new information. In relation to this, I show that the bid-ask spread of the base firm slightly increases when its closest peer initiates discretionary disclosures, but subsequently decreases upon disclosure by the base firm. In addition, I find that the number of comparable public peers is strongly positively associated with the frequency of discretionary disclosure. Overall, these results suggest that the presence of peer dynamics can induce firms with more peers to provide discretionary disclosures more frequently. This dissertation examines how the lack of comparable public peers ("informational uniqueness") is related to a firm's disclosure policy and information environment. Having less information spillover from other public firms may present an information deficiency if it is not compensated by other components of the information environment. Using textual similarity in business description among firms to measure the extent of peer presence, I find that informational uniqueness is associated with a higher propensity by firms to provide ongoing bundled guidance. This is consistent with firms attempting to mitigate the information deficiency through strengthening their tacit commitment to continued disclosure by providing more information regularly on predictable schedules.Overall, I find a strong negative relationship betwe...

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Section: Frequency Of Discretionary Disclosurementioning

confidence: 99%

Section: Panel B: Difference-in-difference With Matched Firms As Contmentioning

confidence: 99%

Section: Panel B: Difference-in-difference With Matched Firms As Contmentioning

confidence: 99%

“…Dye 1985, Jung andKwon 1988). The two most closely related theoretical papers using a multi-firm setting include Dye and Sridhar (1995) and Jorgensen and Kirschenheiter (2012).…”

Section: Related Literaturementioning

confidence: 99%

mentioning

confidence: 99%

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Informational Uniqueness, Corporate Disclosure, and Information Environment

Chau

2016

SSRN Journal

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The impact of the Sarbanes–Oxley Act on the integrity of financial reporting: Was it meritorious?

Bajra

Aliu

Krasniqi

et al. 2023

J Corp Accounting Finance

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This study investigates whether compliance with the Sarbanes–Oxley Act of 2002 (SOX) sections 302 (financial reporting) and 404 (internal controls) enhances both corporate governance and financial reporting integrity (FRI). It is focused on EU publicly traded companies that are cross‐listed in the US markets. Using a novel approach with respect to operationalization of the SOX, the empirical research integrated into this paper advances the understanding of financial reporting integrity for both practitioners and policymakers. The study argues that financial reporting integrity increased after SOX entered into force but, notably, we find that financial statement assertions improve with compliance with SOX302 but not with SOX404. Examination of the latter relationship at the subsection level also reveals that compliance with certain SOX requirements is not satisfactory.

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Spillover effects of credit default swaps on corporate disclosure along the supply chain

Cedergren,

Luo,

et al. 2024

Rev Quant Finan Acc

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Interactive Discretionary Disclosures*

Cited by 35 publications

References 22 publications

Informational Uniqueness, Corporate Disclosure, and Information Environment

Informational Uniqueness, Corporate Disclosure, and Information Environment

The impact of the Sarbanes–Oxley Act on the integrity of financial reporting: Was it meritorious?

Spillover effects of credit default swaps on corporate disclosure along the supply chain

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