Journal of Finance Vol. 48 No. 2 1993
Disagreements Among Shareholders Over a Firm's Disclosure Policy.
Abstract
This paper examines the issue of voluntary disclosure of information by firms with heterogeneous shareholders. It shows that, in a rational expectations setting, better-informed shareholders prefer less disclosure than less well-informed shareholders. This is due to differences in the adverse risk-sharing effect and the beneficial cost-saving effect of disclosure among shareholders with different risk tolerances and information acquisition cost functions. The presence of individual liquidity shocks is shown to reduce shareholder disagreements regarding a firm's disclosure policy.
- Volume
- 48
- Issue
- 2
- Pages
- 747-60
- Sources
- bibtex:phds-export.bib