The Association between Competition and Managers' Business Segment Reporting Decisions
研究行业竞争水平如何影响管理者选择将哪些业务报告为分部，发现管理者在竞争较弱、利润较高的行业更可能不报告分部，以避免披露商业信息。
This paper investigates the relation between levels of industry competition and managers' choices of which operations to report as business segments. One reason managers have objected to segment disclosures is that these disclosures allegedly provide commercially valuable information to competitors that is not available elsewhere. This objection might seem to imply that managers are most reluctant to provide segment disclosures for operations in highly competitive industries; however, if abnormally high earnings tend to occur in less competitive industries, managers' segment reporting discretion may be exercised to avoid reporting these operations as business segments. Using a sample of 929 firms reporting business segments in their annual reports during 1987 to 1991, I estimate a logit model of management's decision to report operations in a given industry as a segment as a function of two measures of industry competition: the four-firm concentration ratio and a measure of the speed of profit adjustment. The