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

Elisabeth Dedman, Clive Lennox

Research output: Contribution to journalArticle

71 Citations (Scopus)

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. (C) 2009 Elsevier B.V. All rights reserved.
Original languageEnglish
Pages (from-to)210-230
Number of pages21
JournalJournal of Accounting and Economics
Volume48
Issue number2-3
Early online date19 Sep 2009
DOIs
Publication statusPublished - Dec 2009

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