Author： Li Xi
Publisher： Springer Publishing Company
ISSN： 1380-6653
Source： Review of Accounting Studies, Vol.15, Iss.3, 2010-09, pp. : 663-711
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Abstract
This study examines how firms' voluntary disclosure decisions are influenced by product market competition. Using separate measures to capture different dimensions of competition, I show that competition from potential entrants increases disclosure quantity while competition from existing rivals decreases disclosure quantity. I also find that competition enhances disclosure quality mainly through reducing the optimism in profit forecasts and reducing the pessimism in investment forecasts. Moreover, I find that the above association is less pronounced for industry leaders, consistent with industry leaders facing less competitive pressures than industry followers.
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