Regulatory Approval and Biotechnology Product Disclosures

• 成果类型: Article
• 署名作者: Enache, Luminita; Li, Lynn; Riedl, Edward J.
• 署名单位: University of Calgary; Boston University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12758
• 发表日期: 2022
• 页码: 1689-1725
• 关键词: investment opportunity set; CORPORATE DISCLOSURE; SHAREHOLDER LITIGATION; voluntary disclosure; competitive costs; VALUE-RELEVANCE; bad news; INFORMATION; MARKET; COMPENSATION

摘要

This study examines the effect of regulatory approval on a firm's voluntary product-level disclosures. We focus on the US biotechnology industry, a setting that allows direct observation of whether firms disclose more information as products proceed through well-defined-though successively more complex and costly-regulatory hurdles. Consistent with predictions motivated by biotech firms' need to repeatedly raise capital, we find that firms disclose more as their products move to later stages in the development process, both when the products receive regulatory approvals as well as when they receive regulatory denials. In addition, these findings are consistent across phases of development as well as product disclosure categories and are accentuated for firms without internal sources of capital (i.e., lacking product revenue). Collectively, these findings reveal that biotechnology firms respond to the considerable incentives to provide enhanced product disclosure and thus facilitate their ongoing need for capital to proceed through subsequent stages of product development.