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To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1475-679X.2008.00309.x Byline: JEROEN SUIJS (*) Abstract: ABSTRACT This paper considers an overlapping generations model where investors trade in a firm's stock. Investment risk is partly determined by the volatility of the stock price at which current investors can sell their shares to the next generation of investors. It is shown that asymmetric reporting of good and bad news is value relevant as it affects the allocation of risk among future generations of shareholders. Author Affiliation: (*)Department of Accounting and Control, Rotterdam School of Management, Erasmus University. The research of this author has been made possible by a fellowship of the Royal Netherlands Academy of Arts and Sciences. This paper has benefited from the helpful comments and suggestions of an anonymous reviewer, Philip Berger (editor), John Hughes, Thore Johnsen, Michael Kirschenheiter, Evelyn Korn, Brian Mittendorf, Jack Stecher, Alfred Wagenhofer; participants of the Amsterdam-Nyenrode Accounting Research Workshop, Chicago-Minnesota Accounting Theory Conference, Workshop of Accounting and Economics V; and seminar participants at Catholic University of Leuven, Tilburg University, Norwegian School of Economics and Business Administration, and Tel Aviv University. Article History: Received 25 June 2007; accepted 29 March 2008

The details of the research conducted to find out the consequences of voluntarily disclosing bad private information to the public, are presented. The impact of voluntary disclosure environment on disclosure cost and proprietary costs are also presented.

Byline: Teye Marra (1), Jeroen Suijs (2) Keywords: going-public decision; disclosure environments; proprietary cost Abstract: This paper analyzes how differences in disclosure environments affect the firm's choice between private and public capital. Disclosure requirements prescribe to what extent the firm has to release private information that may lead to the firm incurring proprietary costs. We examine which firm types go public in equilibrium, and how the equilibrium outcomes change with changes in the disclosure environments. Our findings show that in a partial financing equilibrium, should such an equilibrium exist, good firms finance privately. This result is robust to changes in the disclosure environment. Author Affiliation: (1) Faculty of Economics, University of Groningen, P.O. Box 800, 9700 AV, Groningen, The Netherlands (2) Department of Accounting and Accountancy, Tilburg University, P.O. Box 90153, 5000 LE, Tilburg, The Netherlands Article History: Registration Date: 03/09/2004 Article note: JEL Classification: G32, M49