Discretionary disclosure and manager horizon: evidence from patenting

• 成果类型: Article
• 署名作者: Glaeser, Stephen; Michels, Jeremy; Verrecchia, Robert E.
• 署名单位: University of North Carolina; University of North Carolina Chapel Hill; University of Pennsylvania
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-019-09520-0
• 发表日期: 2020
• 页码: 597-635
• 关键词: MARKET VALUATION; INNOVATION; INFORMATION; securities; QUALITY; news

摘要

We examine the relation between manager horizon and discretionary disclosure, using patenting as a measure of disclosure. Patenting reflects, in part, a manager's decision to disclose the successful outcome of research and development (R&D). When a firm invests in R&D but does not patent, investors are unsure whether this reflects a failed R&D project or the manager choosing not to patent. We suggest that investors' beliefs about a manager's horizon-whether the manager seeks to maximize short-term stock price or long-term profits-moderates their reactions. When investors believe a manager's horizon is short, they expect the manager to disclose successful outcomes and therefore discount nondisclosure more. We predict that managers will patent more per dollar of R&D spending when their horizons are short and that investors will discount the value of nondisclosing firms more when they believe the manager's horizon is short. We find evidence consistent with these predictions.