How Does Firms' Innovation Disclosure Affect Their Banking Relationships?

• 成果类型: Article
• 署名作者: Saidi, Farzad; Zaldokas, Alminas
• 署名单位: Boston University; Hong Kong University of Science & Technology
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2017.3498
• 发表日期: 2021
• 关键词: innovation disclosure; credit markets; Patenting; private information

摘要

Firms face a trade-off between patenting, thereby disclosing innovation, and secrecy. We show that this trade-off interacts with firms' financing choices. As a shock to innovation disclosure, we study the American Inventor's Protection Act that made firms' patent applications public 18 months after filing, rather than when granted. We find that such increased innovation disclosure helps firms switch lenders, resulting in lower cost of debt, and facilitates their access to syndicated-loan and public capital markets. Our evidence lends support to the idea that public-information provision through patents and private information in financial relationships are substitutes, and that innovation disclosure makes credit markets more contestable.