Unintended Real Effects of EDGAR: Evidence from Corporate Innovation

• 成果类型: Article
• 署名作者: Dambra, Michael; Mihov, Atanas; Sanz, Leandro
• 署名单位: State University of New York (SUNY) System; SUNY Maritime College; University at Buffalo, SUNY; University of Kansas; University of Notre Dame
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2023-0310
• 发表日期: 2024
• 页码: 75-99
• 关键词: research-and-development; Private Firms; disclosure; MARKET; INFORMATION; COSTS; performance; spillovers; GROWTH; MODEL

摘要

We study the real effects on innovation of a transformative change in corporate disclosure dissemination, the implementation of the SEC's EDGAR system. On the one hand, increased disclosure dissemination can lower firms' cost of capital, thereby stimulating innovative activity. On the other hand, increased dissemination can exacerbate proprietary disclosure costs, reducing firms' incentives to innovate. We show that treated firms reduce innovation investment following EDGAR's implementation. In contrast, EDGAR reporting firms' innovation investment cuts are met with an increase in innovation investment by their technology rivals. Consistent with an increase in proprietary costs, EDGAR-filers disclose less about their innovation activities. We also find evidence of a redistribution of innovative activity from public to private firms not subject to EDGAR disclosure requirements. Overall, our results are consistent with increased disclosure dissemination crowding out investment in innovative projects, whose returns negatively depend on information spillovers.