Informational Uniqueness, Corporate Disclosure, and Information Environment

Abstract

The study examines how the lack of comparable public peers (“informational uniqueness”) is related to a firm’s disclosure policy and information environment. Having less information spillover from other public firms may present an information deficiency if it is not compensated by other components of the information environment. Consistent with firms attempting to mitigate the information deficiency through strengthening their tacit commitment to continued disclosure, I find that informational uniqueness is associated with a higher propensity by firms to provide ongoing bundled guidance. Overall, I find a strong negative relationship between informational uniqueness and the quality of corporate information environment only among firms without regular bundled guidance. This suggests that, while informational uniqueness can generate significant information deficiency, firms with strong tacit disclosure commitment are able to largely compensate for the lack of information spillover from peers.