Revealed Proprietary Information Disclosure

• 成果类型: Article
• 署名作者: Zufarov, Rustam
• 署名单位: University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2022-0707
• 发表日期: 2024
• 页码: 441-472
• 关键词: voluntary disclosure; TRADE SECRETS; discretionary disclosure; CORPORATE DISCLOSURE; FIRM CHARACTERISTICS; earnings management; propensity score; stock returns; COMPETITION; AGREEMENTS

摘要

I examine whether and to what extent firms credibly disclose proprietary private information ahead of seasoned equity offerings. I assess proprietary information disclosures based on the magnitude of the association between a private information-based proxy and stock returns. Using a difference-in-differences design around the Securities Offering Reform (SOR) of 2005, which relaxed restrictions on disclosures, I find that equity-issuing firms disclose more than twice as much proprietary information post-SOR relative to pre-SOR and relative to the same change for the control firms. I corroborate my findings using major customer identity disclosure and limiting the sample to firms with multiple equity offerings. Results are robust after controlling for information flow from insider trading, institutional investors, and financial analysts. Finally, I document that disclosure of proprietary information leads to a 10-23 percent drop in underpricing. These findings offer new insights into how firms balance the proprietary costs and benefits of disclosure.