Deterrent Disclosure

The Accounting Review, Forthcoming

51 Pages Posted: 8 Apr 2019 Last revised: 14 Jul 2021

See all articles by Stephen Glaeser

Stephen Glaeser

University of North Carolina (UNC) at Chapel Hill - Accounting Area

Wayne R. Landsman

University of North Carolina Kenan-Flagler Business School

Date Written: July 19, 2019

Abstract

We examine how product market competition affects the disclosure of innovation. Theory posits that product market competition can cause firms to increase their disclosure of innovation to deter product market competitors. Consistent with this reasoning, we find that patent applicants in more competitive industries voluntarily accelerate their patent disclosures, which are credibly disclosed via the United States Patent and Trademark Office. Our inferences are robust to using changes in industry-level import tariffs as sources of plausibly exogenous variation in product market competition in differences-in-differences designs. Consistent with patent disclosure deterring product market competitors, we find that timelier patent disclosures are more strongly associated with declines in the similarity of competitors’ products than are less timely patent disclosures. In total, our results suggest that product market competition increases patent disclosure timeliness, which is consistent with firms using the disclosure of innovation to deter product market competition.

Keywords: voluntary disclosure, innovation, patents, competition

JEL Classification: D23, G38, O30, O31, O33, O34, O38

Suggested Citation

Glaeser, Stephen and Landsman, Wayne R., Deterrent Disclosure (July 19, 2019). The Accounting Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3342691 or http://dx.doi.org/10.2139/ssrn.3342691

Stephen Glaeser (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Accounting Area ( email )

McColl Building
Chapel Hill, NC 27599
United States

Wayne R. Landsman

University of North Carolina Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-3221 (Phone)
919-962-4727 (Fax)

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