As stressed in the literature, disclosure often has different ramifications for firms’ varied constituents. Despite this complexity, a consistent theme in the literature is that a firm’s reliance on a self-interested external supplier for key inputs introduces a disincentive for disclosure. We demonstrate that the presence of forward contracting in such input markets can disable, and even reverse, this well-established theme. When a supplier opts to provide inputs for pre-purchase in a forward market, a buyer can use such pre-purchases to protect against the supplier adjusting input prices upward when disclosure reveals high product demand. This price protection does not imply that the supplier stands to lose under the arrangement—its ability to offer two-tiered pricing (forward and spot prices) provides it with a means of indirect price discrimination. Because of the supplier’s willingness to open a forward market, the firm’s reliance on the supplier for inputs actually promotes disclosure.
Review of Accounting Studies – Springer Journals
Published: Jul 9, 2015
It’s your single place to instantly
discover and read the research
that matters to you.
Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.
All for just $49/month
Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly
Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.
Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.
Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.
All the latest content is available, no embargo periods.
“Hi guys, I cannot tell you how much I love this resource. Incredible. I really believe you've hit the nail on the head with this site in regards to solving the research-purchase issue.”Daniel C.
“Whoa! It’s like Spotify but for academic articles.”@Phil_Robichaud
“I must say, @deepdyve is a fabulous solution to the independent researcher's problem of #access to #information.”@deepthiw
“My last article couldn't be possible without the platform @deepdyve that makes journal papers cheaper.”@JoseServera