Causal ambiguity: shape-flip between product market competition at industry level and voluntary disclosure

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Show simple item record Gago-Rodríguez, Susana Guo, Bing Márquez Illescas, Gilberto Núñez-Nickel, Manuel 2022-02-03T08:50:31Z 2022-02-03T08:50:31Z 2020-02-17
dc.identifier.bibliographicCitation Gago Rodríguez, S., Guo, B., Marquez Illescas, G. & Núñez Nickel, M. (2020). Causal ambiguity: shape-flip between product market competition at industry level and voluntary disclosure. Accounting and Business Research, 50(6), 574–607.
dc.identifier.issn 0001-4788
dc.description.abstract This paper analyses the moderating effect of causal ambiguity on the relation between product market competition (i.e. product substitution) and firms’ voluntary disclosure behaviour. Our empirical results show a ‘shape-flipping function’. That is, we observe an inverse U-shaped relation between competition and disclosure when causal ambiguity is low. Such a relation gradually evolves towards a U shape as the level of causal ambiguity increases. Our theoretical explanation is that causal ambiguity relaxes or inhibits the intensity of the proprietary and agency costs of voluntary disclosure (underlying restrictions of competition), and simultaneously strengthens the subjacent incentives of competition to reveal information. We obtain empirical evidence of this global perspective based on logistic estimations of a sample of US manufacturing firms from 2002 to 2015. Our models use earnings per share (EPS) forecast as a proxy of voluntarily disclosed information, inverse margin rate as a proxy of product market competition at industry level, and several proxies of causal ambiguity (i.e. firm complexity and firm predictability).
dc.description.sponsorship This work was supported by the Spanish Ministry of Economy and Competitiveness under Grants ECO2013-45864-P and ECO2017-87514-P; Community of Madrid under Grant S2015/HUM-3417; and FEDER under Grant UNC315-EE-3636.
dc.format.extent 34
dc.language.iso eng
dc.publisher Taylor & Francis
dc.rights © 2020 Informa UK Limited, trading as Taylor & Francis Group.
dc.rights Atribución-NoComercial-SinDerivadas 3.0 España
dc.subject.other Causal ambiguity
dc.subject.other Competition
dc.subject.other Voluntary disclosure
dc.title Causal ambiguity: shape-flip between product market competition at industry level and voluntary disclosure
dc.type research article
dc.subject.eciencia Economía
dc.subject.eciencia Empresa
dc.rights.accessRights open access
dc.relation.projectID Gobierno de España. ECO2013-45864-P
dc.relation.projectID Gobierno de España. ECO2017-87514-P
dc.relation.projectID Comunidad de Madrid. S2015/HUM-3417
dc.identifier.publicationfirstpage 574
dc.identifier.publicationissue 6
dc.identifier.publicationlastpage 607
dc.identifier.publicationtitle Accounting and Business Research
dc.identifier.publicationvolume 50
dc.identifier.uxxi AR/0000025047
dc.contributor.funder Comunidad de Madrid
dc.contributor.funder Ministerio de Economía y Competitividad (España)
dc.affiliation.dpto UC3M. Departamento de Economía de la Empresa
dc.type.hasVersion AM
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