Voluntary disclosure and its impact on share prices: Evidence from the UK biotechnology sector

Elisabeth Dedman, Stephen W.-J Lin

Research output: Contribution to journalArticle (journal)peer-review

34 Citations (Scopus)


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.
Original languageUndefined/Unknown
Pages (from-to)195-216
JournalJournal of Accounting and Public Policy
Issue number3
Publication statusPublished - 31 May 2008

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