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The impacts of product market competition on the quantity and quality of voluntary disclosures

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  • Xi Li

    (London Business School)

Abstract

This study examines how firms’ voluntary disclosure decisions are influenced by product market competition. Using separate measures to capture different dimensions of competition, I show that competition from potential entrants increases disclosure quantity while competition from existing rivals decreases disclosure quantity. I also find that competition enhances disclosure quality mainly through reducing the optimism in profit forecasts and reducing the pessimism in investment forecasts. Moreover, I find that the above association is less pronounced for industry leaders, consistent with industry leaders facing less competitive pressures than industry followers.

Suggested Citation

  • Xi Li, 2010. "The impacts of product market competition on the quantity and quality of voluntary disclosures," Review of Accounting Studies, Springer, vol. 15(3), pages 663-711, September.
    • Handle: RePEc:spr:reaccs:v:15:y:2010:i:3:d:10.1007_s11142-010-9129-0
    DOI: 10.1007/s11142-010-9129-0
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    Cited by:

    1. Christo Karuna, 2010. "Discussion of “The impact of product market competition on the quantity and quality of voluntary disclosures”," Review of Accounting Studies, Springer, vol. 15(3), pages 712-723, September.
    2. Taqdees Fatima & Bing Xiang Li & Dan Zhang, 2025. "Fostering innovation sustainability with the impact of incremental environmental information disclosure under green credit constraints," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(8), pages 18997-19024, August.
    3. Dan Dhaliwal & Shawn Huang & Inder K. Khurana & Raynolde Pereira, 2014. "Product market competition and conditional conservatism," Review of Accounting Studies, Springer, vol. 19(4), pages 1309-1345, December.
    4. Paul Healy & George Serafeim & Suraj Srinivasan & Gwen Yu, 2014. "Market competition, earnings management, and persistence in accounting profitability around the world," Review of Accounting Studies, Springer, vol. 19(4), pages 1281-1308, December.
    5. Daniel Aobdia, 2015. "Proprietary information spillovers and supplier choice: evidence from auditors," Review of Accounting Studies, Springer, vol. 20(4), pages 1504-1539, December.

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    More about this item

    Keywords

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    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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