Say More to Return Less? Disclosure Subsequent to Successful Technological Innovation

This study examines voluntary disclosure after successful technological innovations and the associated cost of equity capital (COEC) consequences. We find that firms with successful technological innovations, proxied by economic and scientific values of patents, are more likely to voluntarily disclose patent information in Form 8-K filings. However, high product market competition deters firms from providing such patent information. We also find that, unlike scientific values, economic values of patents are positively associated with COEC benefits in the presence of voluntary patent disclosure. Further analysis reveals that COEC benefits are concentrated only for firms facing high product market competition. Our findings have implications for innovative firms operating in competitive environments. These firms may need to carefully weigh the capital market benefits of patent disclosure against potential proprietary information costs, especially when seeking equity financing