Do Firms Respond to Peer Disclosures? Evidence from Disclosures of Clinical Trial Results

55 Pages Posted: 25 Mar 2019 Last revised: 14 Aug 2019

See all articles by Vedran Capkun

Vedran Capkun

HEC Paris - Accounting and Management Control Department

Yun Lou

Singapore Management University - School of Accountancy

Yin Wang

Singapore Management University - School of Accountancy

Date Written: March 1, 2019

Abstract

We examine whether a firm’s decision to disclose non-financial proprietary information depends on peer disclosures of similar information. Using a sample of 5,035 unique clinical trials by U.S. pharmaceutical firms over the 2007-2014 period, we find that the firm is less likely to disclose its own clinical trial results if peers have published clinical trial results pertaining to the same medical condition. Conditional on disclosing clinical trial results, the firm is also less likely to disclose the trial results on time when peers have disclosed their clinical trial results. Our cross-sectional tests suggest that proprietary costs of disclosure play an important role in the relation between peer disclosures and the firm’s own disclosure. In particular, the negative relation is more pronounced when proprietary costs of disclosure are higher. Taken together, our findings provide new evidence on the interplay between peer and own disclosures of non-financial proprietary information.

Keywords: peer disclosure, clinical trial, proprietary cost

JEL Classification: I11; M41;G10

Suggested Citation

Capkun, Vedran and Lou, Yun and Wang, Yin, Do Firms Respond to Peer Disclosures? Evidence from Disclosures of Clinical Trial Results (March 1, 2019). HEC Paris Research Paper No. ACC-2019-1333, Singapore Management University School of Accountancy Research Paper No. 2019-102, Available at SSRN: https://ssrn.com/abstract=3344942 or http://dx.doi.org/10.2139/ssrn.3344942

Vedran Capkun

HEC Paris - Accounting and Management Control Department ( email )

Jouy-en-Josas Cedex
France

Yun Lou (Contact Author)

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore 178900
Singapore

Yin Wang

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore 178900
Singapore

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