Voluntary Disclosure in a Multi-Audience Setting: An Empirical Investigation
35 Pages Posted: 12 Sep 2000
Date Written: July 11, 2000
Abstract
We investigate the issue of voluntary disclosure in multi-audience settings by focusing on the electric utility industry as it transitions toward deregulation. We consider three target audiences: industry regulators, capital market participants, and product market competitors. As predicted, we find that utilities tend to disclose less strategic information in jurisdictions where the stranded cost recovery issue is unresolved, consistent with incentives to appear "weak" to regulators. Further, we find that utilities whose viability in a deregulated environment is more uncertain tend to provide more disclosures, unless they face greater threat from competitors. These results are consistent with prior theoretical research on conflicting disclosure incentives to capital markets versus product markets.
Key Words: Voluntary disclosure; Electric utilities; Deregulation
JEL Classification: M41, M45, L51
Suggested Citation: Suggested Citation
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