Negative Peer Disclosure
57 Pages Posted: 2 Jul 2019 Last revised: 26 Oct 2019
Date Written: October 24, 2019
This paper provides first evidence of negative peer disclosure (NPD), an emerging corporate strategy to publicize adverse news about industry peers on social media. Consistent with NPDs being implicit positive self-disclosures, disclosing firms experience a two-day abnormal return of 1.6-1.7% over the market and industry. Further exploring the benefits and costs of such disclosure, we find that NPD propensity increases with the degree of product market rivalry and technology proximity and that disclosing firms exhibit better operating performance than non-disclosing peers in the year following NPD. These results rationalize peer disclosure and extend the scope of the literature beyond self-disclosure.
Keywords: Peer Disclosure, Spillover, Product Market Rivalry, Technology Proximity, Social Media
JEL Classification: G14, L1, M41, O30
Suggested Citation: Suggested Citation