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Perceived competition, profitability and the withholding of information about sales and the cost of sales

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  • Dedman, Elisabeth
  • Lennox, Clive
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    Abstract

    We investigate the relation between perceived competition and voluntary disclosure in the absence of capital market incentives by examining private UK companies, which have the option to withhold sales and costs of sales information from their publicly-filed accounts. We survey managers about their companies' competitive environments and we calculate archival measures of industry competition. We find that managers are more likely to withhold information about sales and costs if they perceive that current or potential competition is strong. Consistent with disclosure being costlier for successful firms, we also find that more profitable companies are more likely to withhold information.

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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Accounting and Economics.

    Volume (Year): 48 (2009)
    Issue (Month): 2-3 (December)
    Pages: 210-230

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    Handle: RePEc:eee:jaecon:v:48:y:2009:i:2-3:p:210-230

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    Web page: http://www.elsevier.com/locate/jae

    Related research

    Keywords: Voluntary disclosure Managerial perceptions Product market competition Industry concentration;

    References

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    Cited by:
    1. Numan, Wieteke & Willekens, Marleen, 2012. "An empirical test of spatial competition in the audit market," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 450-465.
    2. Manuel Núñez-Nickel & Susana Gago Rodríguez, 2010. "Evolutionary model of existing competition and voluntary disclosure," Business Economics Working Papers id-10-06, Universidad Carlos III, Instituto sobre Desarrollo Empresarial "Carmen Vidal Ballester".
    3. Basil Al-Najjar & Rong Ding, 2014. "Product Market Competition and Corporate Governance Disclosure: Evidence from the UK," Economic Issues Journal Articles, Economic Issues, vol. 19(1), pages 73-94, March.

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