Going-public and the influence of disclosure environments

T. Marra, J. Suijs

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    4 Citations (Scopus)

    Abstract

    This paper analyzes how differences in disclosure environments affect the firm's choice between private and public capital. Disclosure requirements prescribe to what extent the firm has to release private information that may lead to the firm incurring proprietary costs. We examine which firm types go public in equilibrium, and how the equilibrium Outcomes change with changes in the disclosure environments. Our findings show that in a partial financing equilibrium, should such an equilibrium exist, good firms finance privately. This result is robust to changes in the disclosure environment.

    Original languageEnglish
    Pages (from-to)465 - 493
    Number of pages29
    JournalReview of Accounting Studies
    Volume9
    Issue number4
    Publication statusPublished - Dec-2004

    Keywords

    • going-public decision
    • disclosure environments
    • proprietary cost
    • DISCRETIONARY DISCLOSURE
    • SIGNALING GAMES
    • INFORMATION
    • EQUILIBRIA
    • CHOICE
    • QUALITY
    • COSTS

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