The impacts of product market competition on the quantity and quality of voluntary disclosures

This study examines how firms' voluntary disclosure decisions are influenced by the product market competition. Using separate measures to capture different dimensions of competition, I show that competition from potential entrants increases disclosure quantity while competition from existing rivals decreases disclosure quantity. I also find that competition enhances disclosure quality mainly through reducing the optimism in profit-forecasts and reducing the pessimism in investment-forecasts. Moreover, I find that the above association is less pronounced for industry leaders, consistent with industry leaders facing less competitive pressures than industry followers.