Voluntary disclosure and corporate innovation

Sheng-Syan Chen (), Chia-Wei Huang (), Chuan-Yang Hwang () and Yanzhi Wang ()
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Sheng-Syan Chen: National Taiwan University
Chia-Wei Huang: National Chengchi University
Chuan-Yang Hwang: Nanyang Technological University
Yanzhi Wang: National Taiwan University

Review of Quantitative Finance and Accounting, 2022, vol. 58, issue 3, No 8, 1115 pages

Abstract: 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.

Keywords: Innovation; Patent; Voluntary disclosure; SOX (search for similar items in EconPapers)
JEL-codes: D82 G38 M41 O31 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11156-021-01019-7

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