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EARRNINGS MANAGEMENT AND PATENTING DISCLOSURES

Conventional wisdom suggests that firm’s patenting choice is largely due to strategic considerations such as industry competition and the prominence of the invention. We explore this issue from a managerial discretion perspective, suggesting that patenting choice facilitates managerial discretion via earnings management. On the one hand, not filing patents generates a more opaque information environment for market scrutiny, suggesting higher chance of earnings management. On the other hand, stewardship theory indicates that managers use trade secrets to protect their intellectual property. We find that non-patenting firms do not engage in financial earnings management while their real activity based earnings management is lower than patenting counterparts. On average, non-patenting choice does not lead to harmful opaqueness.

Identiferoai:union.ndltd.org:siu.edu/oai:opensiuc.lib.siu.edu:dissertations-2665
Date01 May 2019
CreatorsZheng, Shucui
PublisherOpenSIUC
Source SetsSouthern Illinois University Carbondale
Detected LanguageEnglish
Typetext
Formatapplication/pdf
SourceDissertations

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