Peer effects of corporate product quality information disclosure: Learning and competition

Abstract

This paper examines peer effects of product quality information disclosure and its motivations using a sample of Chinese listed companies. We find that the peers’ product quality information disclosure is positively associated with the firm’s product quality information disclosure. We further show that there are two motivations for this peer effect: learning and competition. In cross-sectional tests, we find the peer effects are more pronounced in samples with high degree of marketization and product quality concerns. Lastly, we show that the peer effects can improve the firm's performance in both the capital and product markets. Our work advances the related literature on peer effects from the perspective of product quality information disclosure.