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Mr. Junhao Liu
Ph.D. Candidate in Accounting
Rotman School of Management
University of Toronto

Using detailed website cookie data collected from U.S. firms’ websites, I investigate the role of consumer data collected by cookies in voluntary disclosure. Cookies infuse first-hand, granular, and real-time data into managers’ information sets and enrich internal information about customers and sales operations. I show that the number of cookies is positively related to the frequency and the likelihood of issuing management sales forecasts. Using FinBERT-based measures, I find that the usage of cookies is also associated with a larger percentage of qualitative disclosure regarding customers, marketing, and products in 10-K filings. I provide evidence that cookies are more useful if they collect data of stronger relevance and larger volume. Additional analyses indicate that data analytic technology assists firms in exploiting cookie-collected data to enhance voluntary disclosure, while data privacy protection mechanisms impair the usefulness of cookie-collected data. Using the California Consumer Privacy Act (CCPA) as a quasi-natural experiment, I provide additional evidence for the causal relation between cookies and voluntary disclosure. Overall, the paper sheds light on the role of consumer data directly collected by firms in financial reporting, highlights the usefulness of cookies in acquiring data to assist with disclosure, and speaks to the effects of data analytic technology as well as the potential impacts of data privacy regulations.