Publication Type

Journal Article

Publication Date

11-2017

Abstract

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.

Keywords

Proprietary Costs, Corporate Disclosure, Customer Identity, Inevitable Disclosure Doctrine, Trade Secrets Law

Discipline

Business and Corporate Communications | Corporate Finance

Research Areas

Corporate Reporting and Disclosure

Publication

Journal of Accounting Research

First Page

1

Last Page

78

ISSN

0021-8456

Identifier

10.1111/1475-679X.12187

Publisher

Wiley: 24 months - No Online Open

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

Additional URL

https://doi.org./10.1111/1475-679X.12187

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