Corporate disclosure: an analysis of different channels

The main objective of this work is to increase the knowledge about corporate disclosure policies though the analysis of two external subjects that may affect the flow of information from companies to the other members of the capital market: press and competitors. Since financial reporting contains several decision-useful information for resources allocation it can be considered the main means that connects corporate with a wide range of stakeholders. Therefore, firms must identify the features of the users of financial reports, classify their focal needs and disclose information that may hold all the four qualitative characteristics (relevance, faithful representation, comparability and understandability) under the two pervasive constrains (materiality and benefits that justify the costs) However, not al the stakeholders have the knowledge and capabilities to efficiently allocate their resources trough the assessment of the information disclosed. Consequently, they need information intermediaries that provides new and/or useful information to them. For example, press analyses, aggregates and opportunely communicates information to a wide public with a sufficient degree of credibility. For this reasons, press can be considered as an important information intermediary. However, evidences on the role of press in reducing information asymmetries are few and controversial. In particular, relations between press coverage and corporate disclosure are unclear. In chapter 2 it is argued that journalist pay attention on both firms with higher disclosure quality, which diffuse more credible information, and company with poor disclosure quality that may be more attractive for readers. Using AIRM disclosure scores and structural equation models, press results associated with more information asymmetries. The cause of this result might be the fact that journalists dedicates more attention to those firms with poor performance or high potential growth. In addition, there is a sort of substitution between official corporate disclosure and press coverage. On one hand, high disclosure standards are generally associated with a potential loss of competitive advantages; on the other hand, theoretical and empirical evidences showed that, ceteris paribus, those firms with better disclosure have higher stock liquidity, lower cost of capital and more intermediation. In other words, the benefits-cost constrain is pivotal in the determination of disclosure level. Since competitors enter in both member of the constrain it seem that the role of competitors is crucial. Beside competitive advantages and the potential benefits, mimicking processes may induce managers to strongly use competitors information. Using AIMR disclosure scores, structural equation models and the identification of industry- leadership in disclosure and in size, in chapter 3 several evidences of the relations between competitors are presented. On one side, managers are induce to follow the behaviours of the leader in disclosure in order to maintain disclosure benefits; on the other, it seems that both firms with good and poor disclosure quality converge to a sort of industry practise. Moreover, while there is no evidence of free-riding, there are strong evidence of both information and reputational herding. As argued in chapter 4, this work might be interesting for firms, investment analysts and investors. In addition, both press coverage and analysis of competitors disclosure policies may be strategically used by firms in order to achieve more benefits.