The Information Content of Corporate Websites

38 Pages Posted: 10 Mar 2021

See all articles by Bradford Lynch

Bradford Lynch

University of Pennsylvania - Accounting Department

Daniel J. Taylor

The Wharton School, University of Pennsylvania

Date Written: January 1, 2021

Abstract

In 2008, the SEC published guidance allowing firms to use corporate websites as an alternative disclosure channel to EDGAR. While the information content and market reaction to traditional disclosure channels such as EDGAR filings and press releases are well-documented, evidence on corporate websites as a disclosure channel is scarce. In this paper, we take the first step toward shedding light on corporate websites as an important source of information to investors. Employing standard event study methods, we develop a novel measure of corporate website content and find that increases in website content provide significant value-relevant information to investors incremental to that contained in traditional disclosure channels. In addition, we find a negative relation website content and information asymmetry, and that this negative relation is most pronounced after the SEC’s 2008 guidance. Collectively, our findings indicate that corporate websites are an economically significant source of new information that supplements traditional disclosure channels considered in prior literature.

Keywords: websites, disclosure, information content, information asymmetry

JEL Classification: G12, G14, G32

Suggested Citation

Lynch, Bradford and Taylor, Daniel, The Information Content of Corporate Websites (January 1, 2021). Available at SSRN: https://ssrn.com/abstract=3791474 or http://dx.doi.org/10.2139/ssrn.3791474

Bradford Lynch

University of Pennsylvania - Accounting Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Daniel Taylor (Contact Author)

The Wharton School, University of Pennsylvania ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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