Peer Effects on Qualitative Disclosure: Evidence from Earnings Press Releases

This paper examines the impact of earlier-reporting peers’ earnings news on the qualitative disclosures of later-reporting firms. Analyzing a comprehensive dataset of publicly traded companies, I find that later-reporting firms in the earnings season are more likely to differentiate their disclosures from those of their earlier-reporting peers when the leader firm reports good news. However, when both leader and lagger firms report positive earnings news, lagger firms tend to align their disclosures with those of the leader firm. This alignment effect strengthens as the window between announcement dates narrows. Additionally, higher EPR similarity is associated with lower market volatility for lagger firms, highlighting how aligned disclosure help stabilize investor expectations and reduce uncertainty. These findings provide empirical evidence on the roles of peer effects and disclosure timing in shaping qualitative disclosures and influencing market responses of later-reporting firms.