Intellectual Property Rights, Holdup, and the Incentives for Innovation Disclosure

41 Pages Posted: 7 Jan 2021

See all articles by Chris Armstrong

Chris Armstrong

University of Pennsylvania - Accounting Department

Stephen Glaeser

University of North Carolina (UNC) at Chapel Hill - Accounting Area

Stella Y. Park

University of Pennsylvania - The Wharton School

Date Written: September 5, 2020

Abstract

We study how the assignment of property rights between employees and their employers influences disclosures that reveal the productivity and ability of individual employees. To do so, we examine the effect of a court ruling that significantly shifted the assignment of intellectual property rights from inventors to their employers, but that was otherwise likely exogenous with respect to disclosure. Using a within-firm-year difference-in-differences design estimated across a sample of multiple firms, we find that firms accelerate their patent disclosures for innovations created by their inventors affected by the ruling, relative to their patent disclosures for innovations created by their unaffected inventors. Our results suggest that the assignment of intellectual property rights and the potential for hold up problems between employees and their employers can affect disclosure decisions.

Keywords: corporate innovation, disclosure, holdup

JEL Classification: J41, J61, 030

Suggested Citation

Armstrong, Chris S. and Glaeser, Stephen and Park, Stella Y., Intellectual Property Rights, Holdup, and the Incentives for Innovation Disclosure (September 5, 2020). Available at SSRN: https://ssrn.com/abstract=3724041

Chris S. Armstrong

University of Pennsylvania - Accounting Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

Stephen Glaeser (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Accounting Area ( email )

McColl Building
Chapel Hill, NC 27599
United States

Stella Y. Park

University of Pennsylvania - The Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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