We examine the causal effect of managerial private benefits on voluntary disclosure practices (proxied by management earnings forecasts). To establish causality, we exploit an exogenous variation in private benefits following the 2003 Tax Reform Act and a twostage least squares with two instrumental variables (corruption index and dual-class structure). The results of the endogeneity tests support a negative causal effect of managerial private benefits on voluntary disclosure. Furthermore, the results show that private benefits encourage managers to withhold bad news and that reductions in voluntary disclosure are differentially larger in firms facing strong monitoring and competition.

​Keywords: Agency problems; Private control benefits; Voluntary disclosure
JEL Classification: M40; D82; G30; H24​