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Information acquisition and voluntary disclosure with supply chain and capital market interaction

  • Biying Shou*
  • , Yaner Fang
  • , Zhaolin Li
    • *Corresponding author for this work

    Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

    15   Link opens in a new tab Citations (Scopus)

    Abstract

    We investigate a firm's information acquisition and voluntary disclosure decisions regarding demand forecast information. We study the interaction among the firm, its supplier, and the external capital market investors who assess the firm's interim equity price. We first analyze when it is beneficial for the firm to acquire demand forecast information, and if such information is acquired, when the firm should disclose it to the supplier and investors. Then, we investigate how the firm's information acquisition and disclosure decisions influence the investors’ and the supplier's pricing strategies. We show that the optimal information disclosure policy for the firm is highly dependent on the corporate myopia level (CML): when the CML is low, the firm discloses low demand information only; when the CML is medium, the firm always withholds demand information; and when the CML is high, the firm discloses high demand information only. Our findings provide a novel plausible explanation to firms’ non-disclosure behaviors commonly observed in practice and highlight the importance of considering the interaction between the supply chain and the capital market.
    Original languageEnglish
    Pages (from-to)878-889
    JournalEuropean Journal of Operational Research
    Volume297
    Issue number3
    Online published14 May 2021
    DOIs
    Publication statusPublished - 16 Mar 2022

    Research Keywords

    • Capital market interaction
    • Game theory
    • Information acquisition
    • Supply chain management
    • Voluntary disclosure

    RGC Funding Information

    • RGC-funded

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    • GRF: Social Network Effects in Retail Supply Chain Management

      SHOU, B. (Principal Investigator / Project Coordinator) & PANG, Z. (Co-Investigator)

      1/09/16 → 26/02/20

      Project: Research

    • TBRS: Safety, Reliability, and Disruption Management of High Speed Rail and Metro Systems

      XIE, M. (Principal Investigator / Project Coordinator), BENSOUSSAN, A. (Co-Principal Investigator), LO, S. M. (Co-Principal Investigator), SHOU, B. (Co-Principal Investigator), SINGPURWALLA, N. D. (Co-Principal Investigator), TSE, W. T. P. (Co-Principal Investigator), TSUI, K. L. (Co-Principal Investigator), YU, Y. (Co-Principal Investigator), YUEN, K. K. R. (Co-Principal Investigator), CHAN, A. B. (Co-Investigator), CHAN, N.-H. (Co-Investigator), CHIN, K. S. (Co-Investigator), CHOW, H. A. (Co-Investigator), Chow, W. K. (Co-Investigator), EDESESS, M. (Co-Investigator), GOLDSMAN, D. M. (Co-Investigator), Huang, J. (Co-Investigator), LEE, W. M. (Co-Investigator), LI, L. (Co-Investigator), LI, C. L. (Co-Investigator), LING, M. H. A. (Co-Investigator), LIU, S. (Co-Investigator), MURAKAMI, J. (Co-Investigator), NG, S. Y. S. (Co-Investigator), NI, M. C. (Co-Investigator), TAN, M.H.-Y. (Co-Investigator), Wang, W. (Co-Investigator), Wang, J. (Co-Investigator), WONG, C. K. (Co-Investigator), WONG, S. Y. Z. (Co-Investigator), WONG, S. C. (Co-Investigator), Xu, Z. (Co-Investigator), ZHANG, Z. (Co-Investigator), Zhang, D. (Co-Investigator), ZHAO, J. L. (Co-Investigator) & Zhou, Q. (Co-Investigator)

      1/01/16 → 31/12/21

      Project: Research

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