Proprietary Costs: Why Do R&D-Active Firms Choose Single-Lender Financing?

• 成果类型: Article
• 署名作者: Griffin, Paul A.; Hong, Hyun A.; Ryou, Ji Woo
• 署名单位: University of California System; University of California Davis; University of California System; University of California Riverside; West Virginia University
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2018-0158
• 发表日期: 2022
• 页码: 263-296
• 关键词: product-market competition; CORPORATE DISCLOSURE; Accounting information; patent publication; earnings quality; Creditor rights; PRIVATE; incentives; INVESTMENT; INNOVATION

摘要

We examine whether proprietary costs drive R&D-active firms' choice of private loan structure. We find that R&D-active firms are more likely to choose single-lender over multi-lender private loan financing. This is consistent with the theory that high-ability entrepreneurs protect their proprietary knowledge by communicating it to a single lender while disclosing generic and less sensitive information to the public. This propensity, however, significantly decreases after the enactment of the American Inventor's Protection Act (AIPA), which accelerated public disclosure of firms' patent details in filings with the U.S. Patent and Trademark Office. This accelerated public disclosure potentially caused R&D information to spill over to rivals, increasing the proprietary costs of single-lender borrowers. AIPA enactment also increased the spread on R&D-active firms' single-lender loans. These findings contribute to the voluntary disclosure and financing choice literature by linking R&D-active firms' choice of singlelender financing to the proprietary costs of public disclosure.