Events

Ms. Xixi Xiao
Ph.D. Candidate in Business Administration (Accounting)
Simon Business School
University of Rochester

This study investigates whether firms factor in proprietary concerns over information spillovers through analysts when granting analysts privileged access to disclosure events. Recognizing that analysts might relay proprietary information to rivals, firms selectively invite analysts based on their rival coverage as a gauge of information leakage risks. Exploiting the setting of analyst/investor days, I hypothesize and find that analysts covering product market rivals that compete more intensively with the firm are less likely to be invited to participate in such events. I further show that the negative relation is amplified for firms with higher proprietary costs, and events with more incremental information and broader management access. Moreover, I establish causality by leveraging the rejection of the Inevitable Disclosure Doctrine as an exogenous shock that reduces the perceived risks of inviting analysts with rival coverage. Overall, the paper sheds light on the selection of information receivers as a novel aspect of disclosure choices firms make in the face of elevated proprietary concerns.