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The spillover effects of MD&A disclosures for real investment: The role of industry competition

Title:

The spillover effects of MD&A disclosures for real investment: The role of industry competition

Durnev, Art and Mangen, Claudine (2020) The spillover effects of MD&A disclosures for real investment: The role of industry competition. Journal of Accounting and Economics, 70 (1). ISSN 0165-4101

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Official URL: https://doi.org/10.1016/j.jacceco.2020.101299

Abstract

We explore whether disclosures in the Management Discussion & Analysis (MD&A) have spillover effects for investment and investment efficiency, and whether spillover effects vary with competition. We focus on the tone of MD&A disclosures and document that the association between a company’s investments and the tone of its rivals’ MD&A disclosures is positive. Moreover, this association is moderated by competition; it is stronger when firms operate in industries that have lower entry costs, are larger, and have less substitutable products. We obtain similar results for investment efficiency. Overall, our evidence suggests that MD&A disclosures have spillover effects for investment that can improve investment efficiency, and that spillover effects are moderated by industry competition.

Divisions:Concordia University > John Molson School of Business > Accountancy
Item Type:Article
Refereed:Yes
Authors:Durnev, Art and Mangen, Claudine
Journal or Publication:Journal of Accounting and Economics
Date:25 January 2020
Funders:
  • RBC Professorship in Responsible Organizations
  • Social Sciences and Humanities Research Council of Canada (SSHRC)
Digital Object Identifier (DOI):10.1016/j.jacceco.2020.101299
Keywords:spillover effects, disclosures, competition, investment, investment efficiency
ID Code:987862
Deposited By: JOSHUA CHALIFOUR
Deposited On:15 Jan 2021 22:08
Last Modified:15 Jan 2021 22:08
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