Public companies have often complained about regulators’ requirements that they disclose certain information, saying the disclosures give their competitors too many clues to their successes. Now new research from Maryland Smith supports that claim, showing that revealing the information cuts down a public company’s competitive advantage faster.
Review of Accounting Studies
Companies reveal more than their own profitability when they issue earnings announcements. They also provide clues about peer firms through a process called information transfer. New research from the University of Maryland’s Robert H. Smith School of Business confirms the spillover effect but also shows that more insights may be gleaned than previously understood.