Technological Peer Pressure and Product Disclosure

• In Event: Strategic Disclosure

Abstract

Competition is multifaceted, and corporate disclosure can be of various types. The alignment between the aspect of competition and the type of disclosure determines the proprietary costs of disclosure. Such an alignment has been overlooked in many prior empirical studies when examining managerial disclosure decisions. In this study we examine the association of technological peer pressure—the technological aspect of competition—with voluntary disclosure of product-development-related information. Given a strong alignment between the technological aspect of competition and product disclosure, we predict and find a negative association between technological peer pressure and product disclosure. In contrast, we find no association between technological peer pressure and management earnings forecasts—the most popularly used type of voluntary disclosure—because of a weak alignment between the technological aspect of competition and earnings projections. Our study advances the understanding of managerial disclosure decisions by highlighting the importance of aligning the type of disclosure with a given aspect of competition.

Authors

• Sean Cao, Georgia State University

• Guang Ma, National University of Singapore

• Jennifer Wu Tucker, University of Florida

• Chi Wan, University of Massachusetts Boston