How do industry peers influence individual firms’ voluntary disclosure strategies?

  • Ling TuoEmail author
  • Ji Yu
  • Yu Zhang
Original Research


This paper investigates how industry peer firms influence the voluntary disclosure strategies of individual firms. Our 2SLS regressions on an empirical sample of management earnings forecasts show that the disclosure strategies of individual firms are significantly influenced by their peer firms’ disclosure behaviors. Specifically, the increased disclosure frequency and disclosure horizon of their industry peers encourage individual firms to increase their disclosure frequency and disclosure horizon. Moreover, firms with S&P credit ratings, higher profitability, larger size, and/or a higher market-to-book ratio tend to be more sensitive to their peer firms’ voluntary disclosure frequency, and react more strongly to peer firms that are of dissimilar size or profitability. Finally, we find that the leader–follower relation does not influence the effects of peer firms’ disclosure strategies. Additional tests suggest that signaling theory and litigation risk provide stronger explanations of why firms mimic their peers than herding theory and free rider theory. This paper contributes to the accounting literature by providing new evidence on the effects of voluntary disclosure. Our findings are also of relevance to industry practitioners, and they shed light on the recently proposed voluntary disclosure regulations.


Management earnings forecasts Industry peer firms Peer effects Voluntary disclosure Managerial incentive Information asymmetry 

JEL Classification

M41 G39 



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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Strome College of BusinessOld Dominion UniversityNorfolkUSA
  2. 2.School of BusinessState University of New York at New PaltzNew PaltzUSA
  3. 3.College of Business and Information TechnologyLawrence Technological UniversitySouthfieldUSA

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