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Prior studies suggest that, in an industry in which several public firms operate (i.e. greater public firm presence), uncertainty about business operations within the industry is reduced due to greater analyst coverage and quality of information disclosure. In this study, the authors examine how UK private firms respond to investment opportunities in fixed intangible assets (FIAs) in an environment characterised by greater public firm presence (PFP).

Using data from 61,278 (1,358) private (public) UK firms operating in ten sectors spanning from 2006 to 2016, the authors conduct this analysis by using panel econometric techniques.

The authors observe that private firms are more responsive to their FIA investment opportunities when they operate in industries with more PFP. Also, the authors find that firms in industries with better information quality use more debt and have longer debt maturity security but less internal cash flow. Overall, the findings indicate that PFP generates positive externalities for private firms by lessening industry uncertainty and enhancing more efficient FIA investment. The results are robust to endogeneity concerns.

A key limitation of the study is that it focuses on a single country (the UK) and therefore there is a likelihood that the results found are specific to this setting but not others, particularly developing and emerging economies. Thus, future studies could explore these ideas from the viewpoint of multiple countries.

Overall, the study demonstrates the importance of information disclosure in driving investment decisions of firms.

While this paper builds on the information disclosure and corporate investment literature, it is one of the first attempts, to the best of the authors’ knowledge, to explore how private UK firms respond to investment in FIAs in an environment characterised by greater PFP.

The theory of managerial discretion and the direct insights it provides in the understanding of the varying impact strategic and operational actions have on organizational change and business fortunes is an area of research potential underexplored in the UK. This study aims to establish whether the measurement of managerial discretion is constant between the two similar societal corporate frameworks of the UK and the USA listed markets.

The extant managerial discretion ranking model, established in the USA, is empirically assessed for its validity and effectiveness across a sample of high- and low-discretion companies from the FTSE 350.

Using accounting measures, a clear and significant difference is established between UK high and low managerial discretion entities. The results prove to be significant in enabling the differential comparative analysis of the institutional characteristics of corporates.

To the best of the authors’ knowledge, no study of this nature has been conducted previously in the UK context. While the original model developed in the USA is now several decades old, the UK results reflect similar industry rankings as found originally in the USA, subject to some differences considered to be a result of the changing nature of global business since the 1990s. This study opens a new seam of novel research, which has the potential to uncover, at a granular level, the differential mores and character of management ethics, styles and practices in such issues as organizational change, corporate culture, governance and social responsibility.