Fulvia Oldrini

This paper examines how voluntary disclosure shapes capital structure choices between debt and equity in public markets under information asymmetry. I develop a model in which voluntary disclosure and debt issues are alternative signaling devices: disclosure complements equity and substitutes for debt. Good-type firms choose optimally between issuing debt or pairing disclosure with equity issues based on the relative costs of each. In a sample of U.S. public firms from 2003 to 2024, I find that, for good-type firms, disclosure is positively related to equity issues and negatively related to bond issues. Two quasi-natural experiments—the 2005 Securities Offering Reform and the 2017 Tax Cuts and Jobs Act—support a causal interpretation of this substitution effect.

Bond roadshows are common in practice, yet they have received little attention in the academic literature, and their economic mechanism is ambiguous ex ante. A roadshow may serve as an information mechanism, helping the issuer and its underwriters learn about investor demand through pre-pricing feedback, or as a marketing mechanism, drawing investors to the issue and building demand during bookbuilding. The corporate bond primary market lets us separate the two mechanisms, because they make opposite predictions for how far the issuer's borrowing spread falls between the opening quote and the final pricing: pricing feedback compresses that move, while demand mobilization widens it. Using hand-collected deal-level data from the German corporate bond market, where roadshows are observable, we find that roadshow bonds tighten more and attract larger order books, and that they price at lower final spreads across issuers but not within them. Cross-sectional tests and two settings that shift issuer visibility and investor demand, based on HDAX 100 membership and the end of the ECB's Corporate Sector Purchase Programme, point the same way. Bond roadshows appear to help issuers mobilize investor demand rather than to refine the opening price through pre-pricing feedback.

We study how mandatory versus voluntary sustainability disclosure affects managerial project selection. A myopic manager chooses between a brown project with higher expected financial returns and a green project with higher expected sustainability returns, and strategically withholds sustainability information under voluntary disclosure. We show that the manager over-invests in brown projects under both regimes, but the distortion is strictly more severe under voluntary disclosure. The mechanism is an option value of withholding: because the brown project's sustainability return has a lower mean, voluntary disclosure disproportionately benefits brown through a distributional effect. At the same time, a countervailing return effect implies that higher financial returns signal brown to the market, lowering the disclosure threshold and partially eroding brown's option value advantage. We show that the distributional effect always dominates for all parameter values under pure strategies. Mandatory disclosure therefore strictly dominates voluntary disclosure in investment efficiency, expected firm value, and aggregate sustainability outcomes. Extending the model to allow for compliance costs, a regulator mandates disclosure if and only if adoption costs are sufficiently low relative to the weight placed on environmental externalities, rationalizing the divergent regulatory trajectories observed across jurisdictions.