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Voluntary Information Disclosure and Corporate Governance : The Empirical Evidence on Earnings Forecasts

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  • Abe, Naohito
  • Chung, Yessica C.Y.

Abstract

This study investigates the determinants of companies' voluntary information disclosure. Employing a large and unique dataset on the companies' own earnings forecasts and their frequencies, we conducted an empirical analysis of the effects of a firm's ownership, board, and capital structures on information disclosure. Our findings are consistent with the hypothesis that the custom of cross-holding among companies strengthens entrenchment by managers. We also find that bank directors force managers to disclose information more frequently. In addition, our results show the borrowing ratio is positively associated with information frequency, suggesting that the manager is likely to reveal more when his or her firm borrows money from financial institutions. However, additional borrowings beyond the minimum level of effective borrowings decrease the management's disclosing incentive.

Suggested Citation

  • Abe, Naohito & Chung, Yessica C.Y., 2009. "Voluntary Information Disclosure and Corporate Governance : The Empirical Evidence on Earnings Forecasts," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 50(2), pages 59-74, December.
    • Handle: RePEc:hit:hitjec:v:50:y:2009:i:2:p:59-74
    DOI: 10.15057/18047
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    References listed on IDEAS

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    More about this item

    Keywords

    Information disclosure; Earnings forecast; Capital structure; Japan;
    All these keywords.

    JEL classification:

    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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