Is the risk of product market predation a cost of disclosure?

Bernard, D (2016) Is the risk of product market predation a cost of disclosure? Journal of Accounting and Economics, 62 (2-3). pp. 305-325. ISSN 0165-4101

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Competitors engage in product market predation when they lower prices or increase expenditures on nonprice competition with the goal of forcing a rival to exit. This study provides evidence that financially constrained firms avoid financial statement disclosure to mitigate predation risk. The empirical tests examine German private firms, most of which failed to comply with financial statement public disclosure requirements until an enforcement change increased noncompliance costs. The evidence shows more financially constrained firms were more likely to avoid disclosure until the change. Results from cross-sectional and supplemental analyses are consistent with predation risk driving this relation.

Item Type: Article
Additional Information: © 2016 Elsevier
Subjects: G > Germany
P > Private companies
D > Disclosure of financial information
C > Competition
Subject Areas: Accounting
DOI: 10.1016/j.jacceco.2016.07.001
Date Deposited: 23 Sep 2016 15:54
Last Modified: 06 Oct 2017 16:47

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