Industry competition and non-GAAP disclosures
Autor(a) principal: | |
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Data de Publicação: | 2021 |
Outros Autores: | |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/10071/20751 |
Resumo: | We examine the role of industry-level product market competition on non-GAAP disclosure decisions. We consider traditional measures of industry competition (concentration, price-cost margin, and set up costs), and large reductions in import tariff rates that identify an exogenous increase in competition. We find that competition intensity influences the likelihood of non-GAAP disclosure and the magnitude of non-GAAP exclusions. Our evidence suggests that strong competition encourages managers to disclose higher non-GAAP earnings. However, when competition is strong, firms with low performance relatively to the industry exclude smaller amounts. We also find that in competitive environments, managers are more likely to provide reconciliations and are less likely to exclude recurring items that are commonly excluded by other firms in the industry. These findings indicate that industry competition has a positive influence on the transparency of non-GAAP disclosures. |
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Industry competition and non-GAAP disclosuresProforma earningsAlternative performance measuresNon-IFRS earningsProprietary costsFinancial performanceIndustry concentrationWe examine the role of industry-level product market competition on non-GAAP disclosure decisions. We consider traditional measures of industry competition (concentration, price-cost margin, and set up costs), and large reductions in import tariff rates that identify an exogenous increase in competition. We find that competition intensity influences the likelihood of non-GAAP disclosure and the magnitude of non-GAAP exclusions. Our evidence suggests that strong competition encourages managers to disclose higher non-GAAP earnings. However, when competition is strong, firms with low performance relatively to the industry exclude smaller amounts. We also find that in competitive environments, managers are more likely to provide reconciliations and are less likely to exclude recurring items that are commonly excluded by other firms in the industry. These findings indicate that industry competition has a positive influence on the transparency of non-GAAP disclosures.Taylor and Francis2022-02-06T00:00:00Z2021-01-01T00:00:00Z20212021-02-19T16:39:10Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/10071/20751eng0001-478810.1080/00014788.2020.1798209Isidro, H.Marques, A.info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-11-09T17:58:59Zoai:repositorio.iscte-iul.pt:10071/20751Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T22:30:49.576920Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Industry competition and non-GAAP disclosures |
title |
Industry competition and non-GAAP disclosures |
spellingShingle |
Industry competition and non-GAAP disclosures Isidro, H. Proforma earnings Alternative performance measures Non-IFRS earnings Proprietary costs Financial performance Industry concentration |
title_short |
Industry competition and non-GAAP disclosures |
title_full |
Industry competition and non-GAAP disclosures |
title_fullStr |
Industry competition and non-GAAP disclosures |
title_full_unstemmed |
Industry competition and non-GAAP disclosures |
title_sort |
Industry competition and non-GAAP disclosures |
author |
Isidro, H. |
author_facet |
Isidro, H. Marques, A. |
author_role |
author |
author2 |
Marques, A. |
author2_role |
author |
dc.contributor.author.fl_str_mv |
Isidro, H. Marques, A. |
dc.subject.por.fl_str_mv |
Proforma earnings Alternative performance measures Non-IFRS earnings Proprietary costs Financial performance Industry concentration |
topic |
Proforma earnings Alternative performance measures Non-IFRS earnings Proprietary costs Financial performance Industry concentration |
description |
We examine the role of industry-level product market competition on non-GAAP disclosure decisions. We consider traditional measures of industry competition (concentration, price-cost margin, and set up costs), and large reductions in import tariff rates that identify an exogenous increase in competition. We find that competition intensity influences the likelihood of non-GAAP disclosure and the magnitude of non-GAAP exclusions. Our evidence suggests that strong competition encourages managers to disclose higher non-GAAP earnings. However, when competition is strong, firms with low performance relatively to the industry exclude smaller amounts. We also find that in competitive environments, managers are more likely to provide reconciliations and are less likely to exclude recurring items that are commonly excluded by other firms in the industry. These findings indicate that industry competition has a positive influence on the transparency of non-GAAP disclosures. |
publishDate |
2021 |
dc.date.none.fl_str_mv |
2021-01-01T00:00:00Z 2021 2021-02-19T16:39:10Z 2022-02-06T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/10071/20751 |
url |
http://hdl.handle.net/10071/20751 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
0001-4788 10.1080/00014788.2020.1798209 |
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info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Taylor and Francis |
publisher.none.fl_str_mv |
Taylor and Francis |
dc.source.none.fl_str_mv |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
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Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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