Intellectual Property: The Law and Economics Approach

Intellectual Property: The Law and Economics Approach

We investigate the impact of reporting regulation on corporate innovation activity. Exploiting thresholds in Europe’s regulation and a major enforcement reform in Germany, we find that forcing a greater share of firms to publicly disclose their financial statements reduces firms’ innovative activities at the industry level. At the same time, it increases firms’ reliance on patenting to protect their innovations, to the extent they continue innovating. Our evidence is consistent with reporting mandates having significant real effects by imposing proprietary costs on innovative firms, which diminishes their incentives to engage in innovative activities. Importantly, we examine and find that this decline in innovative activity is not fully compensated by positive information spillovers (e.g., to competitors, suppliers, and customers) within industries. Thus, our evidence implies that proprietary costs induced by reporting mandates are important consideration for regulators and policy makers.

Matthias Breuer, Christian Leuz, Steven Vanhaverbeke


September 2019

I didn't find this helpful.This was helpful. Please let us know if you found this article helpful.
By |2019-09-30T09:18:11-07:00January 1st, 2018|Copyright, Intellectual Property, Patents, Political Economy, Reference|