How does private firm disclosure affect demand for public firm equity? Evidence from the global equity market

Kim, Jinhwan; Olbert, Marcel

doi:10.1016/j.jacceco.2022.101545

Cited by 10 publications

(3 citation statements)

References 64 publications

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“…In a concurrent study, Kim and Olbert [2022] find that private firms’ disclosure hinders capital supply to public firms, reinforcing the view that disclosure regulations can do unintended harm. However, they do not directly examine firms’ real investments.…”

Section: Introductionmentioning

confidence: 91%

Does Public Firms’ Mandatory IFRS Reporting Crowd Out Private Firms’ Capital Investment?

Liu

Shi

Zeng

et al. 2023

J of Accounting Research

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We investigate how the mandatory adoption of International Financial Reporting Standards (IFRS) by publicly listed firms in the European Union affects peer private firms. We find that private firms' capital investment decreases significantly after the IFRS mandate, relative to public firms. Private firms also display decreased investment when benchmarked against firms relatively insulated from the impact of the IFRS mandate, but the magnitude of the effect is smaller in this case. These results are consistent with the hypothesis that mandatory IFRS reporting (combined with other reforms), while increasing public firms' financing and investment, crowds out funding for private firms. The effect is more pronounced for larger private firms and in industries where public peers have greater external financing needs. Our

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Section: Introductionmentioning

confidence: 91%

Does Public Firms’ Mandatory IFRS Reporting Crowd Out Private Firms’ Capital Investment?

Liu

Shi

Zeng

et al. 2023

J of Accounting Research

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“…As we only use information on MNEs with parent entities providing consolidated financial information (as per the Orbis financials database), our sample includes publicly listed MNEs from around the world and non-listed private MNEs providing consolidated financial information voluntarily or due to regulatory mandates like the widespread financial reporting mandates in the European Union (Breuer 2020;Kim and Olbert 2022). Thus, our sample does 8 In addition to data obtained from official registers, Bureau van Dijk collects information through private correspondence, including phone calls, as well as from company websites and press news.…”

Section: A Note On the Coverage Of Worldwide Corporate Legal Entities...mentioning

confidence: 99%

Multinational firms in tax havens – Corporate motives, regulatory countermeasures, and recent statistics

Submitter,

Olbert,

Spengel

et al. 2023

SSRN Journal

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“…One of the challenges of this study is to find a quasi-natural experimental setting that would mitigate the endogeneity problem. Ideally, the setting will consist of events that change the quantity of publicly available information about industry peers operating in the public space, which will, in turn, mitigate 10 Recently, Kim and Olbert (2022) find that as private firms' disclosure increases, demand for the equity of their publicly traded peers decreases in an international setting.…”

Section: Hypothesismentioning

confidence: 99%

The information spillover role of corporate spin‐offs in financing activities: Evidence from equity sales by private firms through Regulation D

Kim,

Suh

2023

Business Fin & Account

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We examine whether the increased quantity of public information has a spillover impact on equity sales by private industry peer firms. To capture an increase in the quantity of public peer information, we use corporate spin‐offs as these events cause an increase in the number of independent public entities that mandatorily disclose financial reports. Using a unique dataset on private firms’ equity sales extracted from the Securities and Exchange Commission filings pursuant to Regulation D, we find that private industry peers sell more equity following spin‐offs, but the increase is not statistically significant. When we divide our spin‐off sample based on the availability of segment information on subsidiaries before spin‐offs, however, we find a significant an increase in private firms’ equity sales after spin‐offs when parent firms did not previously disclose segment reports. Additional test results suggest that our inferences regarding private industry peers are not entirely explained by an industry‐wide demand shock. Overall, we contribute to the literature by establishing an information spillover channel, incremental to the effect of common industry shocks, flowing from the public to private markets.

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How does private firm disclosure affect demand for public firm equity? Evidence from the global equity market

Cited by 10 publications

References 64 publications

Does Public Firms’ Mandatory IFRS Reporting Crowd Out Private Firms’ Capital Investment?

Does Public Firms’ Mandatory IFRS Reporting Crowd Out Private Firms’ Capital Investment?

Multinational firms in tax havens – Corporate motives, regulatory countermeasures, and recent statistics

The information spillover role of corporate spin‐offs in financing activities: Evidence from equity sales by private firms through Regulation D

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