Event Details

Accounting and Finance, Accounting Research Seminar by Caroline Lee, ESSEC Business School. Paper title: Collaborative Innovation and R&D Disclosure: Evidence from Co-patents

LEE Caroline - Essec - CV

Abstract

This paper examines how firms’ R&D disclosures are associated with collaborative innovation, measured by co-patenting intensity. Compared to solo patents, co-patents face a greater risk of proprietary information leakage that could benefit the co-patenting partners and competitors. We find that firms with more co-patents are likely to disclose less R&D information in 10-K filings, indicating that firms engaging more with other entities in innovation prefer to supply less R&D information publicly. We also find that firms co-patenting more on existing knowledge and in their core business activities disclose less R&D information, suggesting that firms prefer to protect their essential knowledge by keeping the R&D disclosures low. In addition, when IP rights are strongly (weakly) protected, firms with more co-patents disclose more (less) R&D information. These findings suggest that firms supply more information when firms are less concerned about competitors’ value appropriation of the firm’s intellectual property. We also find that competitors’ R&D disclosures are negatively associated with the focal firm’s future profits when competitors do not have co-patents but this relation is mitigated when competitors have co-patents. These results suggest that competitors’ proprietary information is more likely to be leaked and benefit the firm when competitors have R&D collaboration. Lastly, we also investigate alternative mechanisms (i.e, signaling incentives and investors’ information demand) that could affect the relation between co-patenting and R&D disclosures.