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Do biotechnology and health-care firms have poorer continuous disclosure practices as reflected in ASX queries?

Do biotechnology and health-care firms have poorer continuous disclosure practices as reflected... PurposeThe purpose of this study is to investigate whether biotechnology and health-care firms in Australia have poorer continuous disclosure (CD) practices as reflected in Australian Securities Exchange (ASX) queries relative to other firms.Design/methodology/approachUnivariate tests and multivariate logit regressions are used to examine whether the frequency and nature of ASX queries and firms’ replies to price queries differ between biotechnology/health-care firms and the control firms.FindingsResults suggest that biotechnology/health-care firms are more likely to receive volume queries and ASX Listing Rule 4.10 queries. They are also more likely to respond to price queries with new information relative to the control firms. However, biotechnology/health-care firms do not otherwise have statistically significantly different CD practice compared to the control firms, as reflected by the frequency and attributes of various types of ASX queries and by the way firms reply to price queries.Practical implicationsEvidence from this study can help evaluate the adequacy and enforcement of CD requirements and the need for further improvement. Investors can also use the evidence to better understand the information risks associated with investment in the biotechnology/health-care industry.Originality/valuePrior research has not used multivariate methods to examine biotechnology/health-care firms’ CD practice in Australia or to examine accounting determinants of different types of ASX queries and firms’ responses to price queries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting Research Journal Emerald Publishing

Do biotechnology and health-care firms have poorer continuous disclosure practices as reflected in ASX queries?

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1030-9616
DOI
10.1108/ARJ-12-2015-0152
Publisher site
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Abstract

PurposeThe purpose of this study is to investigate whether biotechnology and health-care firms in Australia have poorer continuous disclosure (CD) practices as reflected in Australian Securities Exchange (ASX) queries relative to other firms.Design/methodology/approachUnivariate tests and multivariate logit regressions are used to examine whether the frequency and nature of ASX queries and firms’ replies to price queries differ between biotechnology/health-care firms and the control firms.FindingsResults suggest that biotechnology/health-care firms are more likely to receive volume queries and ASX Listing Rule 4.10 queries. They are also more likely to respond to price queries with new information relative to the control firms. However, biotechnology/health-care firms do not otherwise have statistically significantly different CD practice compared to the control firms, as reflected by the frequency and attributes of various types of ASX queries and by the way firms reply to price queries.Practical implicationsEvidence from this study can help evaluate the adequacy and enforcement of CD requirements and the need for further improvement. Investors can also use the evidence to better understand the information risks associated with investment in the biotechnology/health-care industry.Originality/valuePrior research has not used multivariate methods to examine biotechnology/health-care firms’ CD practice in Australia or to examine accounting determinants of different types of ASX queries and firms’ responses to price queries.

Journal

Accounting Research Journal – Emerald Publishing

Published: Jul 1, 2019

References

  • Enhanced disclosure: exposure draft of proposed ASX listing rule amendments
    ASX
  • The impact of statutory sanctions on the level and information content of voluntary corporate disclosure
  • Exploring the effects of corporate governance on intellectual Capital disclosure: an analysis of European biotechnology companies
  • Management earnings forecasts in a continuous disclosure environment
  • Corporate governance and securities class actions