Download now Free registration required
The authors consider the release of information by a firm when the manager has discretion regarding the timing of its release. While it is well known that firms appear to delay the release of bad news, they examine how external information about the state of the economy (or the industry) affects this decision. They develop a dynamic model of strategic disclosure in which a firm may privately receive information at a time that is random. Because investors are uncertain regarding whether and when the firm has received information, the firm will not necessarily disclose the information immediately. They show that bad news about the economy can trigger the immediate release of information by firms.
- Format: PDF
- Size: 366.7 KB