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Calling for transparency: Evidence from a field experiment

Author

Listed:
  • Wong, T.J.
  • Yu, Gwen
  • Zhang, Shubo
  • Zhang, Tianyu

Abstract

We examine how firms respond to requests for enhanced disclosure that we make on an online investor platform. Exploiting variation in firms' customer and supplier disclosures, we ask a randomized set of non-disclosing firms to provide information on their customers' and suppliers' identities. We find that the firms' probability of disclosure depends on the basis we give for the demand—requests appealing to disclosure's usefulness to investors lead to more frequent disclosure, while those appealing to regulators' preference for disclosure lead to less frequent disclosure. The requests we make on the platform lead to more frequent customer- and supplier-related inquiries from other platform users. We also find that the treatment firms' disclosure of customer and supplier information improves in the next period's regulatory filings. The findings suggest that investor platforms can enhance corporate transparency by increasing retail investors' ability to demand information.

Suggested Citation

  • Wong, T.J. & Yu, Gwen & Zhang, Shubo & Zhang, Tianyu, 2024. "Calling for transparency: Evidence from a field experiment," Journal of Accounting and Economics, Elsevier, vol. 77(1).
    • Handle: RePEc:eee:jaecon:v:77:y:2024:i:1:s0165410123000289
    DOI: 10.1016/j.jacceco.2023.101604
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    More about this item

    Keywords

    Investor online platforms; Retail investors; Disclosure; Customer and supplier information; Proprietary costs;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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