Under What Conditions Does the Manager Withhold Segment Information?

Yutaro Murakami, Atsushi Shiiba

Research output: Contribution to journalArticlepeer-review


This paper considers how a manager decides to disclose or withhold segment information in a capital market setting. In particular, we develop a multi-period model in which a manager in each period decides how to allocate her effort between two businesses. The profit earned in each segment is determined by the manager’s effort and ability as well as each segment’s market profitability and inherent uncertainty. In this setting, in contrast to the expectation of segment disclosure being withheld due to conflicts of interest between managers and shareholders, we identify the conditions under which the manager rationally withholds segment information and achieves higher social welfare. In a setting where the manager is concerned about the current stock price, disclosing more disaggregated information to the stock market does not necessarily lead to more efficient monitoring. The capital market values various segment earnings differently, and in response to this valuation, a rational manager may greatly alter her behavior, leading to inefficient outcomes.

Original languageEnglish
Pages (from-to)1009-1038
Number of pages30
JournalJournal of Accounting, Auditing and Finance
Issue number4
Publication statusPublished - 2023 Oct


  • capital market
  • career concerns
  • segment disclosure
  • social welfare

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics, Econometrics and Finance (miscellaneous)


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