The effect of deregulation and capital market incentives on voluntary disclosure in the electric utility industry Online publication date: Sat, 07-Feb-2015
by D.G. DeBoskey; Sara Kern
International Journal of Economics and Business Research (IJEBR), Vol. 9, No. 2, 2015
Abstract: There are many incentives that impact managers' disclosure decisions. This paper primarily examines one of these incentives - the capital market incentive. We offer a unique setting, the electric utility industry as it transitioned through deregulation, and we show a positive association between voluntary disclosure and deregulation in the post-regulation era. This paper also examines the consistency of four proxies used by accounting researchers to measure disclosure levels: analyst following, analyst forecast revisions, analyst forecast accuracy, and a self-constructed measure. Overall, our results provide empirical evidence that the deregulation of the electric utility industry is strongly associated with an increase in voluntary disclosure, providing additional evidence to support existing theories explaining firms' voluntary disclosure of information. We find mixed supporting evidence for the supplemental proxies. Our findings offer support to regulators that seek to justify the impact of deregulation on disclosure and capital market participants including analysts and firms.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Economics and Business Research (IJEBR):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com