Abstract
We estimate a dynamic model of voluntary disclosure, using annual management forecasts of earnings, that features a manager with price motives and an uncertain, but persistent, information endowment. Our estimates imply that: (1) managers face disclosure frictions 35 percent of the time; (2) conditional on being informed, managers withhold information 17 percent of the time; and (3) conditional on being silent, managers possess information 24 percent of the time. Managers' strategic withholding motives increase investors' uncertainty about earnings by 3 percent. We find that managers' price motives reduce strategic withholding by one-third in response to investors' increased skepticism in the event of non-disclosure.
Original language | English (US) |
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Pages (from-to) | 73-102 |
Number of pages | 30 |
Journal | Accounting Review |
Volume | 95 |
Issue number | 4 |
DOIs | |
State | Published - Jul 2020 |
Keywords
- Disclosure cost
- Information endowment
- Management forecasts
- Strategic withholding
- Structural estimation
- Voluntary disclosure