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Say more to return less? Disclosure subsequent to successful technological innovation

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  • He, Jing
  • Lee, Dongyoung

Abstract

This study examines voluntary patent disclosure following successful technological innovations and the associated cost of equity capital (COEC) consequences. We find that firms with successful innovations, proxied by economic and scientific values of patents, are more likely to voluntarily disclose patent-related information in Form 8-K filings. This finding is more pronounced for firms with lower levels of product market competition and firms with higher ex-ante information asymmetry in the market. We also find that, unlike scientific values, economic values of patents are positively associated with COEC benefits in the presence of voluntary patent disclosure. Our overall findings are consistent with the capital market theory that innovative firms use voluntary disclosure to mitigate information asymmetry for greater capital market benefits.

Suggested Citation

  • He, Jing & Lee, Dongyoung, 2023. "Say more to return less? Disclosure subsequent to successful technological innovation," Journal of Empirical Finance, Elsevier, vol. 70(C), pages 403-426.
    • Handle: RePEc:eee:empfin:v:70:y:2023:i:c:p:403-426
    DOI: 10.1016/j.jempfin.2022.12.012
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    More about this item

    Keywords

    Innovation; Patent disclosure; Economic value; Scientific value; Information asymmetry; Cost of capital;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

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