摘要
This paper investigates empirically the effect of different types of product market competition on levels of voluntary disclosure of proprietary information in financial markets. The author proposes that there are two types of strategic interaction settings relevant to disclosure： capacity competition and price competition. Capacity competition drives firms to disclose more information to attain financial market valuation-related benefits, while price competition drives them to disclose less to protect long-term product market advantages. The author finds that the type of product market competition affects the level of voluntary disclosure over and above the finn＇s external financing needs documented in the previous literature. That is, firms engaged in capacity competition disclose relatively more information than those in price competition. Further analysis shows that capacity competition firms disclose more information than no-strategic-interaction benchmark firms but that price competition firms do not disclose less information than the benchmark firms.
