Voluntary disclosure and its impact on share prices: Evidence from the UK biotechnology sector
Dedman, Elisabeth, Lin, Stephen W.-J, Prakash, Arun J. and Chang, Chun-Hao. (2008) Voluntary disclosure and its impact on share prices: Evidence from the UK biotechnology sector. Journal of Accounting and Public Policy, Vol.27 (No.3). pp. 195-216. ISSN 0278-4254Full text not available from this repository.
Official URL: http://dx.doi.org/10.1016/j.jaccpubpol.2008.02.001
In the UK, SSAP 13 requires that firms immediately expense most of their R&D expenditures. The reported earnings of high-R&D expenditure firms are therefore likely to convey less value-relevant information to investors than those of less research-intensive firms. Using a sample of firms from the high-R&D UK biotechnology/pharmaceutical sector, we find that earnings announcements have a much lower price impact than drug development announcements. We also find that there are significantly more ‘good news’ voluntary announcements than ‘bad news’ announcements. Furthermore, our findings indicate that these firms are more likely to announce late than early stage developments, and that the pattern of disclosures, and the market’s reaction to them, varies between larger, dominant firms and their smaller counterparts.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HG Finance|
|Divisions:||Faculty of Social Sciences > Warwick Business School > Accounting
Faculty of Social Sciences > Warwick Business School
|Journal or Publication Title:||Journal of Accounting and Public Policy|
|Number of Pages:||22|
|Page Range:||pp. 195-216|
|Access rights to Published version:||Restricted or Subscription Access|
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