Template-Type: ReDIF-Paper 1.0
Author-Name: Kyounghun Lee
Author-X-Name-First: Kyounghun
Author-X-Name-Last: Lee
Author-Workplace-Name: WOORI Finance Research Institute, Seoul 
Author-Email: khlee7692@gmail.com  
Author-Name: Frederick Dongchuhl Oh
Author-X-Name-First: Frederick Dongchuhl
Author-X-Name-Last: Oh
Author-Workplace-Name: Seoul National University
Author-Email: dcoh415@snu.ac.kr
Author-Name: Junghum Park
Author-X-Name-First: Junghum
Author-X-Name-Last: Park
Author-Workplace-Name: Lietuvos Bankas, Vilnius University
Author-Email: pjh0101@gmail.com 

Title: Corporate Disclosure, Government Bailout, and Liquidity Crisis
Abstract: This study examines the effects of a government bailout on corporate disclosure when a firm is exposed to the risk of investors withdrawing their investments from the firm. The government bailout affects the behavior of investors, which, in turn, alters the disclosure behavior of the firm. We find that the firm discloses less (more) than the case without a bailout when investors have pessimistic (optimistic) beliefs about the firm. These changes in disclosure decision reduce investors’ expectations about the firm’s fundamentals. Therefore, the government bailout can increase the likelihood of the firm facing a liquidity crisis if it distorts the disclosure behavior of the firm.


Classification-JEL:   M40, G01, G28, D82, D83

Keywords: Corporate Disclosure, Government Bailout, Liquidity Crisis, Coordination Failure, Global Game
Length: 51 pages
Number: 145
Note:
Creation-date: 2026-07-30
Price: Free
Publication-Status: 
File-URL: http://www.lb.lt/uploads/publications/docs/75340_fe9ecccb68d0ae985dc2702fc8632b48.pdf
File-Format: Application/PDF
File-Function: Full text
Handle: RePEc:lie:wpaper:145