Measuring Innovation and Navigating its Unique Information Issues: A Review of the Accounting Literature on Innovation

92 Pages Posted: 12 Jul 2023 Last revised: 29 Dec 2023

See all articles by Stephen Glaeser

Stephen Glaeser

University of North Carolina (UNC) at Chapel Hill

Mark H. Lang

University of North Carolina at Chapel Hill

Date Written: July 5, 2023

Abstract

We review the accounting literature on innovation, focusing on the economic attributes of innovation that collectively differentiate innovation from other assets: novelty, nonrivalry, and partial excludability. These attributes help innovation drive economic growth but create unique information-based challenges that accounting information and researchers are well suited to address. We discuss the definition and measurement of innovation and highlight common mistakes researchers make when measuring innovation and when using sources of plausibly exogenous variation. We then review the accounting literatures on the disclosure, management, financial reporting, taxation, and contracting and financing of innovation. For each of these literatures we identify challenges and opportunities for future research.

Keywords: Innovation

JEL Classification: O3

Suggested Citation

Glaeser, Stephen and Lang, Mark H., Measuring Innovation and Navigating its Unique Information Issues: A Review of the Accounting Literature on Innovation (July 5, 2023). Kenan Institute of Private Enterprise Research Paper No. 4500800, Available at SSRN: https://ssrn.com/abstract=4500800 or http://dx.doi.org/10.2139/ssrn.4500800

Stephen Glaeser (Contact Author)

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

Mark H. Lang

University of North Carolina at Chapel Hill ( email )

Kenan-Flagler Business School
McColl Building
Chapel Hill, NC 27599-3490
United States
919-962-1644 (Phone)
919-962-4727 (Fax)

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