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The closer the better: Supplier geographic proximity and corporate information disclosure violation

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  • Li, Wanli
  • Lai, Yin
  • Zhong, Yufen

Abstract

This study examines the association between supplier geographic proximity and corporate information disclosure violation. Using panel data with 13,775 firm-year observations of listed firms in China, we find that a supplier geographically closer to a firm (geographic proximity) can suppress the firm's information disclosure violation. This relationship is more pronounced when the supplier provides more specific investments and the firm is a non-state-owned enterprise. The main finding holds after using various measures to address endogeneity, including propensity scorematching and instrumental variable method. Overall, our research suggests the supplier's governance effect on a firm’s information disclosure strategy.

Suggested Citation

  • Li, Wanli & Lai, Yin & Zhong, Yufen, 2024. "The closer the better: Supplier geographic proximity and corporate information disclosure violation," The North American Journal of Economics and Finance, Elsevier, vol. 69(PA).
    • Handle: RePEc:eee:ecofin:v:69:y:2024:i:pa:s106294082300147x
    DOI: 10.1016/j.najef.2023.102024
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    More about this item

    Keywords

    Supplier geographic proximity; Geographic distance; Corporate information disclosure violation; Specificinvestment;
    All these keywords.

    JEL classification:

    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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