The Cross-Sectional Determinants of Disclosure Timeliness: An Examination of Quarterly Segment Disclosures

Abstract

Using a sample of multisegment firms, we investigate firms' decisions to provide timely disclosure of segment sales and/or profits. Of our sample of 278 firms, 156 disclose segment sales and profits, 44 provide only segment sales, and 78 provide no segment data in their quarterly reports. We find that quarterly segment disclosure is positively related to firm size, analyst following, and leverage. Similar to prior research showing that firms are less likely to disclose operations in less competitive industries as business segments in their annual reports, we find that firms in less competitive industries are less likely to provide quarterly disclosures. Firms with higher past earnings growth rates are also less likely to provide these disclosures.Among firms that provide some segment data in their quarterly reports, we find that as leverage increases the likelihood of limiting disclosures to sales decreases. In addition, as past earnings growth rates increase the likelihood of limiting quarterly disclosures to segment sales increases.

JEL Classification: M41, M45