The American Inventors Protection Act : A Natural Experiment on Innovation Disclosure and the Cost of Debt
(2019) In International Review of Finance 19(3). p.641-651- Abstract
We examine the impact of innovation disclosure through patenting on firms' cost of debt, focusing on the American Inventors Protection Act (AIPA) as an exogenous shock in innovation disclosure regulation. Post-AIPA, firms have an incentive to apply for patents only if commercial success is likely. Accordingly, we expect post-AIPA patents to be a better proxy for successful innovation activity, and thus to have a stronger effect on reducing the cost of debt than pre-AIPA patents. Indeed, we find that pre-AIPA patents reduce the cost of debt only for the most innovative firms, while post-AIPA, this effect holds for all firms.
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https://lup.lub.lu.se/record/767c22ce-bc53-40c0-ad45-cdc22de57a26
- author
- Hoffmann, Arvid O.I. ; Kleimeier, Stefanie ; Mimiroglu, Nagihan LU and Pennings, Joost M.E.
- publishing date
- 2019-09-01
- type
- Contribution to journal
- publication status
- published
- subject
- in
- International Review of Finance
- volume
- 19
- issue
- 3
- pages
- 11 pages
- publisher
- Wiley-Blackwell
- external identifiers
-
- scopus:85040336429
- ISSN
- 1369-412X
- DOI
- 10.1111/irfi.12174
- language
- English
- LU publication?
- no
- id
- 767c22ce-bc53-40c0-ad45-cdc22de57a26
- date added to LUP
- 2020-09-18 11:17:12
- date last changed
- 2022-04-19 00:55:12
@article{767c22ce-bc53-40c0-ad45-cdc22de57a26, abstract = {{<p>We examine the impact of innovation disclosure through patenting on firms' cost of debt, focusing on the American Inventors Protection Act (AIPA) as an exogenous shock in innovation disclosure regulation. Post-AIPA, firms have an incentive to apply for patents only if commercial success is likely. Accordingly, we expect post-AIPA patents to be a better proxy for successful innovation activity, and thus to have a stronger effect on reducing the cost of debt than pre-AIPA patents. Indeed, we find that pre-AIPA patents reduce the cost of debt only for the most innovative firms, while post-AIPA, this effect holds for all firms.</p>}}, author = {{Hoffmann, Arvid O.I. and Kleimeier, Stefanie and Mimiroglu, Nagihan and Pennings, Joost M.E.}}, issn = {{1369-412X}}, language = {{eng}}, month = {{09}}, number = {{3}}, pages = {{641--651}}, publisher = {{Wiley-Blackwell}}, series = {{International Review of Finance}}, title = {{The American Inventors Protection Act : A Natural Experiment on Innovation Disclosure and the Cost of Debt}}, url = {{http://dx.doi.org/10.1111/irfi.12174}}, doi = {{10.1111/irfi.12174}}, volume = {{19}}, year = {{2019}}, }