Information Acquisition and Voluntary Disclosure with Supply Chain and Capital Market Interaction

2021 ◽  
Author(s):  
Biying Shou ◽  
Yaner Fang ◽  
Zhaolin Li
Keyword(s):  
Supply Chain ◽  
Capital Market ◽  
Information Acquisition ◽  
Voluntary Disclosure ◽  
Market Interaction

scholarly journals Information Acquisition and Its Incentives in an E-Commerce Supply Chain under the Offline Showroom Model

2021 ◽  
Vol 16 (5) ◽  
pp. 1791-1804
Author(s):  
Mengli Li ◽  
Xumei Zhang
Keyword(s):  
Supply Chain ◽  
Information Acquisition ◽  
Incentive Contracts ◽  
Demand Forecast ◽  
Competition Intensity ◽  
Demand Information ◽  
Optimal Information ◽  
Acquisition Strategy ◽  
The One ◽  
The Impact

Recently, the showroom model has developed fast for allowing consumers to evaluate a product offline and then buy it online. This paper aims at exploring the optimal information acquisition strategy and its incentive contracts in an e-commerce supply chain with two competing e-tailers and an offline showroom. Based on signaling game theory, we build a mathematical model by considering the impact of experience service and competition intensity on consumers’ demand. We find that, on the one hand, information acquisition promotes supply chain members to obtain demand information directly or indirectly, which leads to forecast revenue. On the other hand, information acquisition promotes supply chain members to distort optimal decisions, which results in signal cost. The optimal information acquisition strategy depends on the joint impact of forecast revenue, signal cost and demand forecast cost. Notably, in some conditions, the offline showroom will not acquire demand information even when its cost is equal to zero. We also design two different information acquisition incentive contracts to obtain Pareto improvement for all supply chain members.

How novice analysts understand supply chain process models: an experimental study of using diagrams and texts

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Joerg Leukel ◽  
Vijayan Sugumaran
Keyword(s):  
Supply Chain ◽  
Information Acquisition ◽  
Empirical Evaluation ◽  
Process Models ◽  
Chain Process ◽  
Content Type ◽  
Textual Representations ◽  
Scor Model ◽  
Supply Chain Process ◽  
Diagram Group

PurposeProcess models specific to the supply chain domain are an important tool for the analysis of interorganizational interfaces and requirements of information technology (IT) systems supporting supply chain decision-making. The purpose of this study is to examine the effectiveness of supply chain process models for novice analysts in conveying domain semantics compared to alternative textual representations.Design/methodology/approachA laboratory experiment with graduate students as proxies for novice analysts was conducted. Participants were randomly assigned to either the diagram group, which worked with “thread diagrams” created from the modeling grammar “Supply Chain Operation Reference (SCOR) model”, or the text group, which worked with semantically equivalent textual representations. Domain understanding was measured using cognitively demanding information acquisition for two different domains.FindingsDiagram users were more accurate in identifying product-related information and organizing this information in a graph compared to those using the textual representation. The authors found considerable improvements in domain understanding, and using the diagrams was perceived as easy as using the texts.Originality/valueThe study's findings are unique in providing empirical evidence for supply chain process models being an effective representation for novice analysts. Such evidence is lacking in prior research because of the evaluation methods used, which are limited to scenario, case study and informed argument. This study adds the diagram user's perspective to that literature and provides a rigorous empirical evaluation by contrasting diagrammatic and textual representations.

The Effect of Voluntary Disclosure on Investment Inefficiency

2020 ◽  
pp. 0000-0000 ◽  
Author(s):  
Ilan Guttman ◽  
Xiaojing Meng
Keyword(s):  
Cash Flow ◽  
Information Acquisition ◽  
Voluntary Disclosure ◽  
Efficiency Loss ◽  
Decision Stage ◽  
Choice Decision

We introduce real decisions (a project choice decision, an investment scale decision, and an information acquisition decision) to the Dye (1985) voluntary disclosure framework and examine how the prospect of voluntary disclosure affects managers' real decisions. Riskier projects lead to more volatile environment and hence entail higher efficiency loss at the subsequent investment scale decision stage if managers are uninformed. If managers are informed, they can withhold bad information, and the value of this option is higher for riskier projects. We show that the voluntary nature of managers' disclosure may lead to two types of inefficiencies: (1) managers may choose riskier projects, which generate lower expected cash flow due to the higher efficiency loss at the subsequent decision stage, and (2) managers may overinvest in information acquisition, because informed managers with bad information have the option to pool with uninformed mangers and benefit from being overpriced.

scholarly journals Evidence on why firms use different disclosure outlets

2016 ◽  
Vol 29 (3) ◽  
pp. 274-291
Author(s):  
Alexey Feigin ◽  
Andrew Ferguson ◽  
Matthew Grosse ◽  
Tom Scott
Keyword(s):  
Empirical Evidence ◽  
Information Content ◽  
Information Acquisition ◽  
Voluntary Disclosure ◽  
Abnormal Return ◽  
Design Methodology ◽  
Small Subset ◽  
Market Reactions ◽  
Content Type ◽  
Acquisition Costs

Purpose The purpose of this study is to consider why firms use different disclosure outlets. The authors argue that the firm's choice of disclosure outlet can be explained by voluntary disclosure theories and investigate whether the market response around different disclosure outlets varies. Design/methodology/approach The authors investigate differences in the characteristics of firms purchasing analyst research, holding investor presentations or Open Briefings and compare market reactions around each disclosure event. Findings The authors find that firm incentives to reduce information acquisition costs or mitigate disclosure risk affect firm disclosure outlet choice, and mixed evidence in support of talent signalling motivations. There is a lower absolute abnormal return around Open Briefings and a higher signed abnormal return around purchased analyst research. Research limitations/implications The research is exploratory in nature and only considers a small subset of disclosure outlets. There may be differences in information content across disclosure outlets. Originality/value They show disclosure outlets are not homogenous and provide empirical evidence voluntary disclosure theories help explain differences between firms’ use of disclosure outlets. Considering the growing number of disclosure outlets available, disclosure outlet choice is likely to be an increasingly important topic in accounting research.

Auditor choice as a commitment device

2018 ◽  
Vol 16 (3) ◽  
pp. 374-394
Author(s):  
Akihiro Noda
Keyword(s):  
Earnings Management ◽  
Capital Market ◽  
Private Information ◽  
Information Acquisition ◽  
Design Methodology ◽  
Limited Attention ◽  
Content Type ◽  
Auditor Choice ◽  
Error Cost ◽  
Commitment Device

Purpose This study aims to examine how firms choose an auditor in the presence of bilateral information asymmetry between insiders and outsiders regarding firms’ economic performance. Design/methodology/approach This study presents a one-period reporting bias game with a firm’s risk-neutral manager and investors in the capital market, in which a manager with private information chooses an auditor and reports earnings to investors who acquire their own information. The analysis focuses on the possibility that the manager engages an auditor to constrain earnings management as a commitment device to minimize reporting error cost. Findings The results show that the manager’s optimal auditor choice is determined based on investor sensitivity to the earnings report, and managerial incentives for earnings management, discounted by the uncertainty of reporting errors. The results for optimal auditor choice are counterintuitive: engaging a higher-quality auditor could seemingly be associated with aggressive earnings management. Originality/value This study advances the understanding of the theoretical basis of firms’ auditor choice in the context of market investors’ information acquisition when auditors exercise their discretion in reporting. This issue has received limited attention in the extant literature.

scholarly journals Effects Of Voluntary Disclosure Of The Schedule Of Manufacturing Cost On Analysts’ Earnings Forecasts: Evidence From Korea

2017 ◽  
Vol 33 (3) ◽  
pp. 623-636
Author(s):  
Hyunmin Oh ◽  
Sambock Park ◽  
Heungjoo Jeon
Keyword(s):  
Capital Market ◽  
Voluntary Disclosure ◽  
Earnings Forecasts ◽  
Manufacturing Cost ◽  
Positive Direction ◽  
Negative Direction ◽  
Supervisory Authority ◽  
Set Up ◽  
The Relationship ◽  
The Capital Market

We provide the effects of voluntary disclosure of the schedule of manufacturing cost on analysts’ earnings forecasts. We set up and analyze the disclosure of the schedule of manufacturing cost as a proxy for voluntary disclosure. Specifically, we examine the associations between voluntary disclosure of it and the accuracy of analysts’ earnings forecasts and bias in earnings forecasts. The results of our study are as follows. First, the relationship between voluntary disclosure of the schedule of manufacturing cost and the accuracy of analysts’ earnings forecasts is significant in the positive (+) direction. This means that the accuracy of analysts’ earnings forecasts is higher in the case of the firms that voluntarily disclosed the schedule of manufacturing cost, as compared to other firms. Second, the relationship between voluntary disclosure of the schedule of manufacturing cost and analysts’ bias in earnings forecasts is significant in the negative (-) direction. This means that analysts underestimate earnings in the case of the firms that voluntarily disclose the schedule of manufacturing cost, as compared to other firms. Since the schedule of manufacturing cost is still an interesting item and useful information in the capital market, the results of our study provide important implications not only to managers, but also to investors and supervisory authority. Limitations of our study include the fact that not all diverse variables that affect voluntary disclosure and analysts’ forecasts are considered. 

scholarly journals Information Externalities and Voluntary Disclosure: Evidence from a Major Customer's Earnings Announcement

2020 ◽  
Vol 95 (6) ◽  
pp. 73-96
Author(s):  
Young Jun Cho ◽  
Yongtae Kim ◽  
Yoonseok Zang
Keyword(s):  
Supply Chain ◽  
Voluntary Disclosure ◽  
Data Availability ◽  
Earnings Guidance ◽  
Future Prospects ◽  
Earnings Announcement ◽  
Supply Chain Relationships ◽  
Information Transfers ◽  
Positive Effect

ABSTRACT We examine the relation between information externalities along the supply chain and voluntary disclosure. Information transfers from a major customer's earnings announcement (EA) can substitute for its supplier's disclosure. Conversely, if the customer's EA increases uncertainties regarding the supplier's future prospects, it can increase the demand for disclosure. After controlling for information incorporated in supplier returns, we find that the supplier is more likely to issue earnings guidance after the customer's EA when the EA news deviates more from the market's expectation. The positive effect of the customer's news on earnings guidance is weaker when common investors, supply-chain analysts, or a common industry allow investors to better understand the value implications of the news, while the effect increases with the importance of the customer to the supplier. The effect is also stronger when EA news is negative rather than positive. Collectively, the results suggest that supply-chain relationships influence voluntary disclosure. Data Availability: All data are publicly available from sources indicated in the text.

scholarly journals PENGUNGKAPAN INOVASI DISRUPTIF INDUSTRI PERBANKAN INDONESIA

2021 ◽  
Vol 5 (3) ◽  
Author(s):  
Djoko Suhardjanto ◽  
Agung Nur Probohudono ◽  
Indrian Supheni
Keyword(s):  
Human Capital ◽  
Value Creation ◽  
Capital Market ◽  
Financial Services ◽  
Voluntary Disclosure ◽  
Disruptive Innovation ◽  
Financial Capital ◽  
Organizational Capital ◽  
Difference Test ◽  
Positive Effect

Voluntary disclosure is corporate communication to the broader public than disclosures required by capital market regulations. The disclosure of information is beneficial as a consideration in making decisions. The Disruptive innovation disclosure is a voluntary disclosure that provides information about the state of extraordinary innovation in the company. Disruptive innovation is used to describe revolutionary innovations and not evolutionary innovations (Thomond and Lettice, 2002). Outstanding innovation to expand, develop new markets and provide new functions, affecting existing market relationships. This research is critical to know the company's adaptive capacity, going concern, sustainability, and value creation. This study examines whether financial capital, human capital, and organizational capital affect the disruptive innovation disclosure. This quantitative study uses data from banking financial services companies listed on the IDX from 2015 to 2019. There are 205 data observations observed—processing and data analysis using OLS regression. Additional analysis performed was the ANOVA difference test. The results showed that the level of disruptive innovation disclosure was 30.96%. The disclosure story is low and means that adaptive and innovative power is critical in the highly competitive banking industry. Financial capital, human capital and organizational capital have a significant positive effect on the disruptive innovation disclosure.

scholarly journals Information sharing and leakage in the two-echelon supply chain

2019 ◽  
Author(s):  
Jingru Wang ◽  
Zhiyuan Zhen ◽  
Qiang Yan
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Information Acquisition ◽  
Information Leakage ◽  
High Signal ◽  
Market Demand ◽  
Retail Competition ◽  
Ex Post ◽  
Private Signals ◽  
Demand Information

We consider ex post demand information sharing and leakage in a two-echelon supply chain consisting of one supplier and two retailers competing in quantities. The incumbent retailer has an advantage to acquire information about the market at a cost. If he invests in information acquisition, he privately acquires a signal about the market demand. We examine the incumbent’s incentive of information acquisition and sharing, and the upstream supplier’s information leakage strategy. We confirm that the incumbent’s information acquisition and sharing decisions depend on whether the information acquisition is observable. When it is observable, the incumbent fully shares his private signals even though the shared high signal may hurt him. However, when it is unobservable, the incumbent can share the favorable signal (low signal) and withhold the unfavorable signal (high signal). Moreover, we also find that the supplier will always leak the signal to the entrant no matter what signal she acquires. In addition, we demonstrate under the information sharing and leakage strategy, it may benefit the whole supply chain when the retail competition intensity is not very large.

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