Product market competition and disclosure deficiencies in different mandatory filing types: Evidence from SEC comment letters

Using firms' receipt of SEC comment letters, this study investigates their selection of mandatory filing types when producing deficient disclosures in response to the product market competition. Empirical evidence reveals a positive association between two firm-level measures of product market competition and a firm's likelihood of receiving comment letters for non-10-K filings. These patterns are particularly pronounced when firms face a higher likelihood of new market entrants or operate as industry followers. Additionally, firms receiving comment letters for non10-K filings experience increased sales and market share in the subsequent year. Overall, these findings suggest that firms strategically make deficient disclosures in non-10-K filings to minimize regulatory costs.