Review of Accounting Studies

, Volume 15, Issue 3, pp 663–711 | Cite as

The impacts of product market competition on the quantity and quality of voluntary disclosures



This study examines how firms’ voluntary disclosure decisions are influenced by product market competition. Using separate measures to capture different dimensions of competition, I show that competition from potential entrants increases disclosure quantity while competition from existing rivals decreases disclosure quantity. I also find that competition enhances disclosure quality mainly through reducing the optimism in profit forecasts and reducing the pessimism in investment forecasts. Moreover, I find that the above association is less pronounced for industry leaders, consistent with industry leaders facing less competitive pressures than industry followers.


Product market Potential competition Existing competition Profits Investments Management forecasts 

JEL classification

D4 D80 L1 M40 M41 



I am grateful to my supervisor, Lakshmanan Shivakumar, for his support and guidance. I appreciate comments from the editor, Stephen Penman, two anonymous referees, the discussant, Christo Karuna, and other participants at the 2009 Review of Accounting Studies Conference. I also thank Maria Correia, Francesca Franco, Julian Franks, Emeric Henry, Oguzhan Karakaş, Ningzhong Li, Yun Lou, Ane Tamayo, İrem Tuna, Oktay Urcan, Florin Vasvari, Paolo Volpin, Li Zhang, and workshop participants at University of Minnesota, University of Pittsburgh, McGill University, University of Illinois at Chicago, University of Washington, University of Georgia, University of Southern California, Temple University, Ohio State University, Boston College, London School of Economics and Political Science, HEC Paris, ESSEC Business School, INSEAD, Lancaster University, Singapore Management University, National University of Singapore, and Nanyang Technological University.


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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.London Business SchoolLondonUK

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