Disclosure policy choices under regulatory threat

J.P.M. Suijs, J.L. Wielhouwer

Research output: Contribution to JournalArticleAcademicpeer-review


This article shows that firms “voluntarily” increase their disclosures in response to the threat of more stringent disclosure regulations. These disclosures are mostly just sufficient to deter regulation. However, when investment risk is low, both managers and investors might strictly prefer the regulation deterring equilibrium. We further find that in many cases, regulation can only be deterred by asymmetric disclosure behavior of the firms. This suggests that coordination issues and free-riding may be important reasons why self-regulation may fail. The results also indicate the importance of considering political pressure and regulatory threats to explain observed symmetric and asymmetric voluntary disclosure behavior.

Original languageEnglish
Pages (from-to)3-28
Number of pages26
JournalRand Journal of Economics
Issue number1
Early online date18 Dec 2018
Publication statusPublished - Mar 2019

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