Voluntary disclosure and corporate innovation
Journal
Review of Quantitative Finance and Accounting
Date Issued
2021
Author(s)
Abstract
We examine whether a firm’s voluntary disclosures, proxied by management earnings forecasts, affect its innovation activity. A firm making more disclosures generates fewer patents and lower-quantity patents. Enactment of SOX is applied as a natural experiment for an exogenous shock to voluntary disclosure. Corporate innovation is reduced for accelerated filers, especially after SOX becomes effective. Nondedicated institutional ownership, R&D spillover, and rival firms’ innovation are higher for accelerated filers after SOX. There is more of a negative effect of voluntary disclosure on innovation activity when product markets are highly competitive, industry information diffusion is speedy, and disclosures are more informative. ? 2021, The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.
Subjects
Innovation
Patent
SOX
Voluntary disclosure
SDGs
Type
journal article