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Disagreements among Shareholders over a Firm's Disclosure Policy

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  • Kim, Oliver

Abstract

This paper examines the issue of voluntary disclosure of information by firms with heterogeneous shareholders. It shows that, in a rational expectations setting, better-informed shareholders prefer less disclosure than less well-informed shareholders. This is due to differences in the adverse risk-sharing effect and the beneficial cost-saving effect of disclosure among shareholders with different risk tolerances and information acquisition cost functions. The presence of individual liquidity shocks is shown to reduce shareholder disagreements regarding a firm's disclosure policy. Copyright 1993 by American Finance Association.

Suggested Citation

  • Kim, Oliver, 1993. " Disagreements among Shareholders over a Firm's Disclosure Policy," Journal of Finance, American Finance Association, vol. 48(2), pages 747-760, June.
  • Handle: RePEc:bla:jfinan:v:48:y:1993:i:2:p:747-60
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    Cited by:

    1. Holden, Craig W & Subrahmanyam, Avanidhar, 1996. "Risk Aversion, Liquidity, and Endogenous Short Horizons," Review of Financial Studies, Society for Financial Studies, vol. 9(2), pages 691-722.
    2. Verrecchia, Robert E., 2001. "Essays on disclosure," Journal of Accounting and Economics, Elsevier, vol. 32(1-3), pages 97-180, December.
    3. Ciprian-Dan COSTEA, 2015. "Accounting Information Relevance On Capital Markets," SEA - Practical Application of Science, Fundația Română pentru Inteligența Afacerii, Editorial Department, issue 8, pages 235-240, June.
    4. Velury, Uma & Jenkins, David S., 2006. "Institutional ownership and the quality of earnings," Journal of Business Research, Elsevier, vol. 59(9), pages 1043-1051, September.
    5. Haung, Meng & Marsden, Alastair & Poskitt, Russell, 2006. "The Impact of Disclosure Reform on the NZX's Financial Information Environment," Working Paper Series 3835, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

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