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Voluntary disclosure incentives: Evidence from the municipal bond market

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  • Cuny, Christine

Abstract

I investigate the trade-off between capital market incentives, reputational concerns, and administrative costs in the public disclosure decisions of municipal bond issuers. After Ambac׳s bankruptcy, issuers of insured debt increase disclosure relative to issuers of uninsured debt. After local per capita income declines or expenditures increase, issuers, particularly those with strong electoral incentives and weak voter oversight, reduce disclosure. After the implementation of an online filing repository, issuers with few dissemination channels increase disclosure relative to other issuers. Overall, my findings support a positive relationship between voluntary disclosure, risk, and low-cost dissemination, to the extent reputational capital is not threatened.

Suggested Citation

  • Cuny, Christine, 2016. "Voluntary disclosure incentives: Evidence from the municipal bond market," Journal of Accounting and Economics, Elsevier, vol. 62(1), pages 87-102.
    • Handle: RePEc:eee:jaecon:v:62:y:2016:i:1:p:87-102
    DOI: 10.1016/j.jacceco.2016.04.004
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    More about this item

    Keywords

    Voluntary disclosure; Risk; Political economy; Information transmission; Municipal debt;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing

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