Theory suggests a negative relationship between disclosure and the cost of capital. However, empirical research has not, in general, confirmed this. In particular, <link rid="b6">Botosan (1997)</link> finds no evidence of a negative relationship for firms with a high analyst following, and moreover, <link rid="b7">Botosan and...

We introduce a probabilistic framework for hysteresis, a ubiquitous phenomenon in economic situations involving sunk costs. The framework is applied to a simple model of a firm's market entry/exit decisions. We study the influence of sunk cost size, width of the hysteretic loop, and of...