Disclosure, Patenting, and Trade Secrecy
Journal of Accounting Research, 0[10.1111/1475-679X.12580]
80 Pages Posted: 19 Jan 2021 Last revised: 23 Oct 2024
There are 2 versions of this paper
Disclosure, Patenting, and Trade Secrecy
Journal of Accounting Research, 0[10.1111/1475-679X.12580]
Number of pages: 80
Posted: 19 Jan 2021
Last Revised: 23 Oct 2024
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Co-Opetition and Disruption with Public Ownership
CEPR Discussion Paper No. DP16025
Number of pages: 54
Posted: 14 Jul 2021
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5
Date Written: June 02, 2024
Abstract
Patent applications often reveal proprietary information to competitors, but does such disclosure harm firms or also benefit them? We develop and empirically support a theory showing that when firms patent enhancements to incumbent, non-disruptive technologies, they can cooperate more easily on these technologies, increasing their profitability. The downside of cooperating on non-disruptive technologies is that the investment in and commitment to disruptive technologies decline. To improve their commitment to disruptive technologies, some firms rely more on trade secrecy. We provide empirical support for these predictions. We document that after a patent reform that made information about patent applications widely accessible, firms cooperate more and charge higher markups. Furthermore, the nature of patented innovation has changed, with the proportion of non-disruptive patents increasing substantially. Finally, while some firms start patenting more, others patent less and rely more on trade secrecy, with the response depending on the attractiveness of firms' innovation prospects.
Keywords: disclosure, patenting, trade secrecy, competition, cooperation, innovation, disruptive investments, breakthrough innovation
JEL Classification: G31, G32, L41, O31, M40
Suggested Citation: Suggested Citation
Boot, Arnoud W. A. and Vladimirov, Vladimir, Disclosure, Patenting, and Trade Secrecy (June 02, 2024). Journal of Accounting Research, 0[10.1111/1475-679X.12580], Available at SSRN: https://ssrn.com/abstract=3741208 or http://dx.doi.org/10.1111/1475-679X.12580
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