2018
DOI: 10.2308/accr-52201
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Does Reporting Transparency Affect Industry Coordination? Evidence from the Duration of International Cartels

Abstract: Firms coordinate their actions with industry peers, thereby affecting product market competition. Using the cartel setting, we investigate how financial reporting transparency affects industry coordination. Economic theory predicts that transparency might either prolong cartel duration through increased contracting efficiency, or destabilize cartels due to earlier detection of deviating members. We test these predictions on firms indicted by the European Commission for anticompetitive behavior between 1980 and… Show more

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Cited by 47 publications
(7 citation statements)
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References 98 publications
(118 reference statements)
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“…We believe that these differences make financial disclosure an important mechanism to study from the antitrust perspective. In a related paper, Goncharov and Peter [2019] find that when firms switch to international accounting standards and thereby increase the transparency of their statements, cartel members can more easily identify deviating peers, and the stability of the cartels that are eventually convicted drops. Instead, we ask how firms change their financial disclosure following the need to sustain coordination in product markets.…”
Section: Conceptual Backgroundmentioning
confidence: 99%
“…We believe that these differences make financial disclosure an important mechanism to study from the antitrust perspective. In a related paper, Goncharov and Peter [2019] find that when firms switch to international accounting standards and thereby increase the transparency of their statements, cartel members can more easily identify deviating peers, and the stability of the cartels that are eventually convicted drops. Instead, we ask how firms change their financial disclosure following the need to sustain coordination in product markets.…”
Section: Conceptual Backgroundmentioning
confidence: 99%
“…Similarly, if a cartel is the name of the game, the only way to survive might be to join the cartel, where cartel members divide markets among themselves (Goncharov and Peter 2019).…”
Section: Structural Model Of Financial Motivementioning
confidence: 99%
“…Misreporting in accounting is often a convenient way of concealing illegal transactions (Qiu and Slezak 2019). Lack of transparency makes concealment in accounting convenient (Davidson, Dey, and Smith 2019;Goncharov and Peter 2019). Managers can withhold bad news in accounting misrepresentation (Bao et al 2019).…”
Section: Structural Model Of Organizational Opportunitymentioning
confidence: 99%
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“…Possibilities and threats exist both for individual members of the organization as well as for the corporation (Jonnergård, Stafsudd, and Elg 2010;Goldstraw-White 2012;Huang and Knight 2017;Naylor 2003). It is convenient to exploit possibilities and to avoid threats by financial means (Blickle, Schlegel, Fassbender, and Klein 2016;Leonard and Weber 1970;Goncharov and Peter 2019).…”
Section: Structural Modelmentioning
confidence: 99%