No. 143: Private Peers’ Disclosure Transparency and Public Firms’ Information Environment

Year: 2024
Type: Working Paper


This study examines how private peers’ disclosure transparency affects public firms’ information environment. Exploiting the variation in private firms’ importance and the availability of their financial information, we document lower analyst forecast quality when private peer importance in the respective industry is higher. We further find that this association is driven by opaque private peers and primarily manifests when public focal firms’ information availability is relatively poor. Finally, a difference-in-differences analysis shows increased forecast activity for public focal firms around transparent private peers’ disclosure dates. Overall, our findings are aligned with the cost-benefit trade-off that analysts face when acquiring and integrating information. By documenting the relevance of private peers’ disclosure transparency for public firms’ information environment, we contribute to the debate about disclosure mandates for private firms.

Participating Institutions

TRR 266‘s main locations are Paderborn University (Coordinating University), HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, Goethe University Frankfurt, University of Cologne and Leibniz University Hannover who share the same research agenda.

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