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Political connections and voluntary disclosure: Evidence from around the world

Author

Listed:
  • Mingyi Hung

    (The Hong Kong University of Science and Technology Business School)

  • Yongtae Kim

    (Santa Clara University)

  • Siqi Li

    (Santa Clara University)

Abstract

Motivated by the international business literature that examines the interactions between political forces and business environments, we investigate whether and how political connections affect managers’ voluntary disclosure choices. We show that compared to non-connected firms, connected firms issue fewer management earnings forecasts. In addition, relative to non-connected firms, connected firms have a greater increase in the frequency of management forecasts subsequent to the elections that damage their political ties. Further analyses suggest that lack of capital market incentives, reduced litigation risk, and lower proprietary costs shape politically connected firms’ unique voluntary disclosure choices.

Suggested Citation

  • Mingyi Hung & Yongtae Kim & Siqi Li, 2018. "Political connections and voluntary disclosure: Evidence from around the world," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(3), pages 272-302, April.
    • Handle: RePEc:pal:jintbs:v:49:y:2018:i:3:d:10.1057_s41267-017-0139-z
    DOI: 10.1057/s41267-017-0139-z
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