Do biotechnology and health-care firms have poorer continuous disclosure practices as reflected in ASX queries?

Abstract

Purpose The purpose of this study is to investigate whether biotechnology and health-care firms in Australia have poorer continuous disclosure (CD) practices as reflected in Australian Securities Exchange (ASX) queries relative to other firms. Design/methodology/approach Univariate tests and multivariate logit regressions are used to examine whether the frequency and nature of ASX queries and firms’ replies to price queries differ between biotechnology/health-care firms and the control firms. Findings Results suggest that biotechnology/health-care firms are more likely to receive volume queries and ASX Listing Rule 4.10 queries. They are also more likely to respond to price queries with new information relative to the control firms. However, biotechnology/health-care firms do not otherwise have statistically significantly different CD practice compared to the control firms, as reflected by the frequency and attributes of various types of ASX queries and by the way firms reply to price queries. Practical implications Evidence from this study can help evaluate the adequacy and enforcement of CD requirements and the need for further improvement. Investors can also use the evidence to better understand the information risks associated with investment in the biotechnology/health-care industry. Originality/value Prior research has not used multivariate methods to examine biotechnology/health-care firms’ CD practice in Australia or to examine accounting determinants of different types of ASX queries and firms’ responses to price queries.