Timing, modifications, and tenor of firms' mandatory R&D disclosures: The role of competition

Abstract

Regulatory requirements for disclosure are often designed to advance transparency and public welfare. Yet, firms may approach these mandates with caution. In this study, we investigate the role of competitive pressures on firms' discretion in fulfilling mandatory R&D disclosures. We focus on pharmaceutical firms required to publish their clinical trial results on ClinicalTrials.gov and examine three key elements of disclosure: the timing of disclosure, modifications to pre-established research objectives, and the use of positively toned scientific publications. These disclosure elements are crucial because they can potentially undermine the regulatory goals of enhancing transparency and public welfare. Our findings indicate that, under intense competition, firms disclose their R&D results more promptly. However, they make more extensive changes to their stated research objectives and are more likely to link positively toned scientific publications to their disclosures. We discuss the implications of our findings for the literature on R&D disclosures and questionable reporting, as well as for regulators and policymakers enforcing disclosure mandates.