When You Talk, I Remain Silent: Spillover Effects of Peers’ Mandatory Disclosures on Firms’ Voluntary Disclosures

73 Pages Posted: 10 Aug 2016 Last revised: 24 Jun 2020

See all articles by Matthias Breuer

Matthias Breuer

Columbia University

Katharina Hombach

Carl von Ossietzky University of Oldenburg

Maximilian A. Müller

ESMT Berlin

Date Written: April 1, 2019

Abstract

We predict and find that regulated firms’ mandatory disclosures crowd out unregulated firms’ voluntary disclosures. Consistent with information spillovers from regulated to unregulated firms, we document that unregulated firms reduce their own disclosures in the presence of regulated firms’ disclosures. We further find that unregulated firms reduce their disclosures more the greater the strength of the regulatory information spillovers. Our findings suggest that a substitutive relationship between regulated and unregulated firms’ disclosures attenuates the effect of disclosure regulation on the market-wide information environment.

Keywords: Mandatory disclosure, voluntary disclosure, information spillovers, crowding-out

JEL Classification: M41, M48, G38

Suggested Citation

Breuer, Matthias and Hombach, Katharina and Müller, Maximilian A., When You Talk, I Remain Silent: Spillover Effects of Peers’ Mandatory Disclosures on Firms’ Voluntary Disclosures (April 1, 2019). Available at SSRN: https://ssrn.com/abstract=2820209 or http://dx.doi.org/10.2139/ssrn.2820209

Matthias Breuer

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Katharina Hombach (Contact Author)

Carl von Ossietzky University of Oldenburg ( email )

Ammerländer Heerstraße 114-118
Oldenburg, 26129
Germany

Maximilian A. Müller

ESMT Berlin ( email )

Schlossplatz 1
Berlin, 10178
Germany

HOME PAGE: http://faculty-research.esmt.berlin/person/maximilian-muller/bio

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