Copycat Skills and Disclosure Costs: Evidence from Peer Companies' Digital Footprints
We examine whether firms that imitate peer companies’ strategies (copycats) profit from such behavior and how their success may cause competitive harm to disclosing companies. We identify copycat companies by tracking the digital footprints of investment companies that view disclosures on the SEC EDGAR Web site. We find that copycat companies are able to identify profitable trades that outperform other trades disclosed by the copycatted companies by 5.5% annually. Such stock-screening skills are related to investment sophistication and research intensity. Furthermore, copycats inflict greater damage on the performance of disclosing companies when they possess superior copycat skills, when disclosed trading strategies take longer to complete, and when disclosed stock holdings are characterized by high information asymmetry.
This is the peer reviewed version of the following article: [Copycat Skills and Disclosure Costs: Evidence from Peer Companies’ Digital Footprints. Journal of Accounting Research (2021)], which has been published in final form at https://doi.org/10.1111/1475-679X.12369. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions: https://authorservices.wiley.com/author-resources/Journal-Authors/licensing/self-archiving.html#3.
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Work Title | Copycat Skills and Disclosure Costs: Evidence from Peer Companies' Digital Footprints |
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License | In Copyright (Rights Reserved) |
Work Type | Article |
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Publication Date | June 10, 2021 |
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Deposited | June 17, 2022 |
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