Technological Peer Pressure and Product Disclosure

Cao, Sean; Ma, Guang; Tucker, Jenny Wu; Wan, Chi

doi:10.2139/ssrn.2741991

Cited by 12 publications

(44 citation statements)

References 47 publications

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“…In an empirical examination of shareholder voting on CSR proposals, the authors find a significant subsequent increase in peer firms CSR activity. Effect of peer groups on firms' financing and investing decisions has been well documented in the literature (see Bizjak et al, 2008;Leary and Roberts, 2014;Bird et al, 2018;Cao et al, 2018). The competitive advantage hypothesis also predicts higher CSR for SIN firms: H1.…”

Section: Hypothesis Development 21 Moral Rebalancing and Competitive Advantagementioning

confidence: 86%

“…Similarly, Bizjak et al (2008) find that firms with below industry median pay, compensate CEOs more to catch up to the industry level pay. Bird et al (2018) document how firms' changes in tax paying and financial reporting behavior impact their peers; and Cao et al (2018) show the impact of voluntary disclosure of technological innovation affects its peer through competition in the product markets.…”

Section: Introductionmentioning

confidence: 99%

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Corporate social responsibility (CSR) practices by SIN firms

Sharma

Song

2018

ARA

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Purpose The purpose of this paper is to examine corporate social responsibility (CSR) practices of SIN firms. SIN firms are firms from controversial sectors such as tobacco, alcohol, gambling and firearms. Design/methodology/approach This paper explains contrasts CSR practices of SIN firms with similar size and industry non-SIN counterparts. Findings This paper shows that SIN firms conduct more CSR practices than non-SIN firms. This paper also finds that CSR practices of SIN firms are value relevant only when these firms are performing below their peers. Originality/value The motivation for SIN firms to engage in higher CSR is the competitive advantage hypothesis and not moral rebalancing.

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Section: Hypothesis Development 21 Moral Rebalancing and Competitive Advantagementioning

confidence: 86%

Section: Introductionmentioning

confidence: 99%

Corporate social responsibility (CSR) practices by SIN firms

Sharma

Song

2018

ARA

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“…Under technological competition, R&D projects that firms undertake serve as a decisive underlying competitive advantage over their peers. Because economic rents acquired through these R&D and innovative activities of a firm will erode over time due to the emergence of imitators and new entrants (Bloom et al 2013;Cao et al 2018), it is important for the firm to protect the barriers generated by technological investments against the risks of information leakage, leading the firm to be more wary of it. Thus, we expect that, if firms' information-leakage concerns do play a role in affecting firms' propensity to contract a patent law firm, firms with a higher technologically competitive threat will be less likely to contract a patent law firm following the AIPA than firms with a lower technologically competitive threat.…”

Section: Technological Competitionmentioning

confidence: 99%

Do Mandatory Disclosures Affect a Firm's Decision to Contract with Outside Suppliers?

Lee¹

2020

Preprint

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We investigate whether disclosure regulation influences firms' contracting decisions with outside suppliers. In deciding whether to contract with outside suppliers that provide value through their knowledge or expertise, firms face a trade-off between the benefits of the contract (i.e., knowledge gained) and potential information leakage through outside suppliers. We use the patent setting where firms can choose to use the services of a patent law firm that provides access to expert knowledge regarding the technological area in which the client firms specialize. We predict that while firms that face decreased potential costs associated with information leakage are more likely to contract with a patent law firm, firms that face increased potential costs will rely more on inhouse experts. Using the American Inventor's Protection Act (AIPA) as a patent disclosuremandating shock that influences the costs of contracting with a patent law firm, we find results consistent with our prediction. In cross-sectional analyses, we find this result is more pronounced when proprietary costs are more salient. Collectively, our results suggest changes in the information environment due to changes in disclosure regulation affect firms' decision to contract with outside suppliers.

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“…This may not be the case in our setting for two reasons. First, because of its qualitative nature, the disclosure mandated by the UK reform is potentially less actionable (Cao et al (2018)). Qualitative disclosure often does allow more boilerplate and non-specific disclosure (Hope et al (2016)), which in turn does not allow stakeholders to exert pressure on companies to change real activity (Christensen et al (2019)).…”

Section: Introductionmentioning

confidence: 99%

Tax Strategy Disclosure: A Greenwashing Mandate

et al. 2021

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Firms are facing progressively more stringent tax disclosure requirements. In this paper, we examine whether increased qualitative tax transparency leads to intended outcomes using, as an exogenous shock, the 2016 UK reform that mandated the disclosure of a tax strategy for firms above a certain size threshold. We find that firms that have to publish a separate tax strategy report significantly increase their voluntary tax disclosure in the annual reports, but we show no widespread effect on tax avoidance, measured by changes in effective tax rates. We document two mechanisms through which mandating a tax strategy report affects overall tax disclosure. First, we find large changes in disclosure for firms facing high public scrutiny. Second, firms with higher quality of tax strategy reports increase the qualitative discussion of their tax affairs in their annual reports by larger amounts, while firms with lower quality reports show increases in tax avoidance. Our results demonstrate the difficulty of generating a standard that effectively incentivizes desirable behavior when the disclosure mandate is asking for purely qualitative information.

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Technological Peer Pressure and Product Disclosure

Cited by 12 publications

References 47 publications

Corporate social responsibility (CSR) practices by SIN firms

Corporate social responsibility (CSR) practices by SIN firms

Do Mandatory Disclosures Affect a Firm's Decision to Contract with Outside Suppliers?

Tax Strategy Disclosure: A Greenwashing Mandate

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