Does Mandatory Disclosure for Private Firms Increase Their Chances of Going Public?

How do disclosure requirements influence a private firm’s decision to go public? This is an important question for regulators and corporate finance professionals, given current debate about how much information private firms should have to disclose. Conceptually, public disclosure requirements for private firms can lead to greater exposure of the firm’s confidential and proprietary information. Keeping this information out of the hands of competitors is a major factor that pushes firms to stay private. However, the introduction of laws that compel firms to disclose their private information essentially strips away this advantage. As a result, one would expect the ability … Read more