Using a sample of US biotech firms, this paper examines the joint impact of product-related voluntary disclosure and corporate governance on a firms' information environment, specifically on analysts forecast accuracy, dispersion, precision of public and private information. Moreover, we investigate whether voluntary disclosure was consistently disclosed over time. Our findings, shows that the quality of corporate governance affects information transparency and play a role in reducing the uncertainty associated with future firms' performance by increasing the precision of analysts' common information and forecast accuracy, only when voluntary disclosure is constant over time. Analysts forecast dispersion decreases when more independent directors sit on the board. Voluntary disclosure and corporate governance quality are two mechanisms that act as complement to improve the quality of information available to financial analysts.

This study tests for direct and indirect effects of voluntary corporate governance codes on company disclosure practices. Two direct effects of the codes are expected: (1) an overall improvement in company disclosure practices, which is greater when the codes have a greater emphasis on disclosure, and (2) a leveling out of disclosure practices across companies (larger improvements in companies that were previously poorer disclosers) due to the codes minimum comply-or-explain standards. The codes are also expected to have an indirect effect on disclosure practices through their effect on company governance practices. The results show that the introduction of codes in eight East Asian countries has been associated with lower analyst forecast error and a leveling out of disclosure practices across companies. The codes are also found to have an indirect effect on company disclosure practices through their effect on board independence. This suggests that voluntary corporate governance codes have both a significant direct effect and a significant indirect effect on company disclosure practices.

This review lays out a research perspective on earnings quality. We provide an overview of alternative definitions and measures of earnings quality and a discussion of research design choices encountered in earnings quality research. Throughout, we focus on a capital markets setting, as opposed, for example, to a contracting or stewardship setting. Our reason for this choice stems from the view that the capital market uses of accounting information are fundamental, in the sense of providing a basis for other uses, such as stewardship. Because resource allocations are ex ante decisions while contracting/stewardship assessments are ex post evaluations of outcomes, evidence on whether, how and to what degree earnings quality influences capital market resource allocation decisions is fundamental to understanding why and how accounting matters to investors and others, including those charged with stewardship responsibilities. Demonstrating a link between earnings quality and, for example, the costs of equity and debt capital implies a basic economic role in capital allocation decisions for accounting information; this role has only recently been documented in the accounting literature. We focus on how the precision of financial information in capturing one or more underlying valuation-relevant constructs affects the assessment and use of that information by capital market participants. We emphasize that the choice of constructs to be measured is typically contextual. Our main focus is on the precision of earnings, which we view as a summary indicator of the overall quality of financial reporting. Our intent in discussing research that evaluates the capital market effects of earnings quality is both to stimulate further research in this area and to encourage research on related topics, including, for example, the role of earnings quality in contracting and stewardship.

Empiricists document that firms more often voluntarily disclose bad news than good news and link this pessimism to managers' increased incentives not to fall short of earnings expectations. This paper analyzes the voluntary disclosure of a manager's private information by explicitly considering her incentives to meet or beat an analyst's earnings forecast. The model predicts that managers who face strong incentives to meet or beat these forecasts more frequently disclose bad news than good news in order to guide analysts' expectations about future earnings downward. This pessimism is higher in markets with less informed managers and may hold even if the manager has strong incentives for high stock prices and meet-or-beat incentives are comparably low.

This dissertation examines how managerial incentives in contested takeovers affect voluntary disclosure strategies. I study characteristics of voluntary disclosure around contested takeovers, based on the conjecture that good news in earnings forecasts serves as a defensive strategy to resist a takeover and/or to negotiate a higher offer price. To gauge the relation of voluntary disclosure on takeover consequences, I examine the association between voluntary disclosure and target premiums as well as the length of time to resolve the acquisition. Using a difference-in-differences research design, I find that relative to friendly targets, target management in contested target firms alters the timing of normal information flows by forecasting more good news during the takeover. Managers also manipulate the content of information by releasing optimistically biased forecasts during the takeover to favorably influence the market. Further investigations indicate that target firms adopt voluntary disclosure and alter strategies at the time of contested takeover as a means to convey favorable inside information. The stock market responds positively to optimistic forecasts issued during the contested takeover. Moreover, voluntary disclosure influences contested takeovers by helping target firms negotiate better offers and postpone the M&A process. As a whole, this study demonstrates that target firms adopt voluntary disclosure and alter their strategies under the threat of contested takeover to reveal their true worth and enhance their bargaining power. Unlike prior literature that documents value-destroying managerial entrenchment resistance, voluntary disclosure by targets with favorable information induces information leakage and is one of the resistance tactics that potentially benefits target shareholders.

This paper examines the relationship between governance variables and voluntary intellectual capital disclosure in a sample of European biotechnology firms. We extend previous research by simultaneously considering governance mechanisms such as the proportion of independent directors, board dimension, CEO duality, and board structure in relationship to voluntary disclosure on intellectual capital. We understand voluntary disclosure as a multidimensional and complex concept and, hence, use the semantic properties of the information disclosed, and on the content of information, as proxies for the quality of disclosure.Our results suggest that governance-related variables strongly influence the quantity of information disclosed, thus confirming our hypotheses. In regard to the quality of disclosure, our results show that (1) the proportion of independent directors is positively related to the disclosure of internal structure, (2) CEO duality is negatively linked to the disclosure of forward-looking information, and (3) board structure helps to improve the annual report's overall readability. We contribute to agency theory by indicating that corporate governance mechanisms and voluntary disclosure can be used strategically to reduce agency conflicts. The results of this study might be of interest to regulators, investment analysts, and market participants.