Abstract

https://ssrn.com/abstract=2728108
 


 



Does Knowledge Protection Benefit Shareholders? Evidence from Stock Market Reaction and Firm Investment in Knowledge Assets


Buhui Qiu


University of Sydney Business School; Financial Research Network (FIRN)

Teng Wang


Board of Governors of the Federal Reserve System

May 1, 2016

FIRN Research Paper No. 2728108

Abstract:     
This paper studies whether knowledge protection affects shareholder value and firms’ investment in knowledge assets using the staggered adoptions and rejections of the inevitable disclosure doctrine (IDD) by U.S. state courts as exogenous changes in the level of knowledge protection. We find positive (negative) abnormal stock returns around the IDD adoption (rejection) day for firms headquartered in the state and uncover a positive IDD treatment effect on firms’ investment in knowledge assets. Moreover, the effects on stock returns and knowledge-assets investment are stronger in more knowledge-oriented states, industries, and firms. Finally, enhancing knowledge protection does not discourage local entrepreneurial activity.

Number of Pages in PDF File: 50

Keywords: Knowledge Protection; Inevitable Disclosure Doctrine; Shareholder Value; Investment in Knowledge Assets

JEL Classification: K11, G14, G31


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Date posted: February 5, 2016 ; Last revised: October 20, 2016

Suggested Citation

Qiu, Buhui and Wang, Teng, Does Knowledge Protection Benefit Shareholders? Evidence from Stock Market Reaction and Firm Investment in Knowledge Assets (May 1, 2016). FIRN Research Paper No. 2728108. Available at SSRN: https://ssrn.com/abstract=2728108 or http://dx.doi.org/10.2139/ssrn.2728108

Contact Information

Buhui Qiu (Contact Author)
University of Sydney Business School ( email )
Room 513, The Codrington Building
The University of Sydney
Sydney, NSW 2006
Australia
+61 2 9036 6435 (Phone)
+61 2 9351 6461 (Fax)
HOME PAGE: http://sydney.edu.au/business/staff/buhuiq
Financial Research Network (FIRN)
C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Teng Wang
Board of Governors of the Federal Reserve System ( email )
20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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