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| Author: | Guo, R-J. Lev, B. Zhou, N. |
| Title: | Competitive costs of disclosure by biotech IPOs |
| Journal: | Journal of Accounting Research
2004 : MAY, 42:2, p. 319-355 |
| Index terms: | Disclosure Costs Bio-technology Initial public offerings |
| Language: | eng |
| Abstract: | This study empirically examines the impact of various competitive cost proxies on the extent of product-related information disclosed by biotech initial public offerings (IPOs) in their prospectuses. The choice of biotech companies operating in a competitive environment, crystalizes the importance of competitive disclosure costs. The focus on product-related information is aimed at a disclosure set for which potential competitive harm is a priori substantial. The empirical analyses establish three disclosure determinants: the stage of product development, availability of patent protection, and venture capital backing. Additionally, the relative size of ownership retained by pre-IPO owners is found to be negatively related to the extent of disclosure, as predicted by signaling models. |
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