Competitive disadvantage and discretionary disclosure in industries

Greg Clinch*, Robert E. Verrecchia

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

67 Citations (Scopus)

Abstract

We explore how competitive disadvantage affects firms' incentives to disclose or withhold infor Mation of common interest to competing firms within a Cournot duopoly. We establish the existence of a unique disclosure equilibrium to the problem of firms disclosing private infor Mation about aggregate demand, and show that firms choose to withhold infor Mation of either very high or very low demand. We also show that both the size of the disclosure interval and ex ante probability of disclosure decreases as the intensity of competition between firms increases.

Original languageEnglish
Pages (from-to)125-137
Number of pages13
JournalAustralian Journal of Management
Volume22
Issue number2
DOIs
Publication statusPublished - 1 Dec 1997
Externally publishedYes

Keywords

  • Competitive disadvantage
  • Disclosure regulation
  • Discretionary disclosure

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