Trade Secrets Law and Corporate Disclosure: Causal Evidence on the Proprietary Cost Hypothesis

• 成果类型: Article
• 署名作者: Li, Yinghua; Lin, Yupeng; Zhang, Liandong
• 署名单位: Arizona State University; Arizona State University-Tempe; National University of Singapore; Singapore Management University
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.12187
• 发表日期: 2018
• 页码: 265-308
• 关键词: sfas no. 131; discretionary disclosure; voluntary disclosure; earnings management; information quality; MARKET; environment; COMPETITION; governance; finance

摘要

This study exploits the staggered adoption of the inevitable disclosure doctrine (IDD) by U.S. state courts as an exogenous shock that generates variations in the proprietary costs of disclosure. We find that firms respond to IDD adoption by reducing the level of disclosure regarding their customers' identities, supporting the proprietary cost hypothesis. Our results are stronger for firms in industries with a higher degree of entry threats, for firms in more volatile industries, and for firms with a lower degree of external financing dependence. Overall, this study represents one of the first efforts in identifying the causal effect of proprietary costs of disclosure on the supply of disclosure.