Common Ownership and Voluntary Disclosure

Disclosure incentives when competing firms have common ownership

“…We base this assumption on prior research that finds that institutional 10 It is also plausible that common owners use voluntary disclosure as a means to coordinate and implement collusive strategies. Pawliczek and Skinner (2018) provide evidence consistent with such a mechanism for why common ownership leads to increased disclosure. While we do not test the collusion hypothesis, our empirical tests attempt to isolate our proposed mechanisms, i.e., lower proprietary costs and greater externality benefits.…”

“…Another proxy for common ownership in an industry is the modified Herfindhal-Hirschman index delta, which captures the extent to which firms competing in a product market are connected through common owners (see e.g.,Anton et al, 2018;Azar et al, 2018) Pawliczek and Skinner (2018). present evidence consistent with a positive association between common ownership and disclosure using the modified Herfindhal-Hirschman index delta to measure common ownership.Electronic copy available at: https://ssrn.com/abstract=3333451…”

“…First, our paper contributes to a growing literature examining the economic implications of common ownership. 5 Specifically, our study (along with Pawliczek and Skinner (2018), discussed below) is the first to examine the effect of common ownership on disclosure incentives and liquidity. Second, this paper is related to the literature examining the relation between institutional ownership and disclosure.…”

“…Finally, a concurrent working paper, Pawliczek and Skinner (2018;henceforth PS), also examines the relation between common ownership and disclosure. Our papers differ along four dimensions.…”

Institutional common ownership and firm value: Evidence from real estate investment trusts

“…Despite the growing literature on ICO and its effect on firm behavior, little research directly investigates the impact of ICO on firm value. One explanation for this lack of research is that ICO may affect firm valuation and performance in various ways, such as through product market competition (He & Huang, 2017), corporate governance (Edmans, Levit, & Reilly, 2019; He, Huang, & Zhao, 2018; Kang, Luo, & Na, 2018), innovation (Borochin, Yang, & Zhang, 2018; Chemmanur, Shen, & Xie, 2016; Freeman, 2018; López & Vives, 2019), mergers and acquisitions (Brooks, Chen, & Zeng, 2018), financial reporting and voluntary disclosure (He et al., 2018; Park, Sani, Shroff, & White, 2018; Pawliczek & Skinner, 2018; Jung, 2013), and cash holdings (Semov, 2017). It is, therefore, difficult to identify accurately through which channel(s) common ownership affects firm value.…”