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Leavey School of Business

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Accounting Professor Siqi Li Head Shot

Accounting Professor Siqi Li Head Shot

Political connections and voluntary disclosure: Evidence from around the world

Siqi Li, Mingyi Hung, Yongtae Kim

Journal of International Business Studies, 2018, 49: 272-302.

Journal of International Business Studies

Abstract: 

Motivated by the international business literature that examines the interactions between political forces and business environments, we investigate whether and how political connections affect managers’ voluntary disclosure choices. We show that compared to non-connected firms, connected firms issue fewer management earnings forecasts. In addition, relative to non-connected firms, connected firms have a greater increase in the frequency of management forecasts subsequent to the elections that damage their political ties. Further analyses suggest that lack of capital market incentives, reduced litigation risk, and lower proprietary costs shape politically connected firms’ unique voluntary disclosure choices.


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