Transparency and firm innovation
By R. Zhong. Journal of Accounting & Economics, 2018
315 citations recorded by the source corpus.
Firm innovation drives both firm competitiveness and economic growth. Constructing a novel firm-patent panel database from 29 countries, I find that transparency directly boosts innovative effort by reducing managerial career concerns. This effect operates through transparency's implicit contracting role: it reduces the sensitivity of management turnover to poor innovative output. Transparency also increases innovative efficiency through its governance role in facilitating efficient allocation of R&D capital. Nonetheless, the benefit of transparency is fully offset in environments with greater proprietary cost. These findings illuminate the unique roles and mechanisms of transparency in promoting innovation incentives and outcomes.
Subfields: Accounting
View Paper: https://www.semanticscholar.org/paper/4b6cfecd1562bde7fd4846f91f2ec24eac6ba7ff
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Citations in the corpus
- Is social capital associated with corporate innovation? Evidence from publicly listed firms in the U.S (2020, unknown): “Zhong (2018) examines the effects of country-level factor such as international accounting standards.”
- The innovation consequences of mandatory patent disclosures (2020, background): “Second, our paper also relates to recent studies on disclosure and innovation that find innovative benefits of transparency in a financial reporting setting (Zhong (2018), Breuer, Leuz, and Vanhaverbeke (2019)).”
- The Linear and Non-Linear Effects of Internal Control and Its Five Components on Corporate Innovation: Evidence from Chinese Firms Using the COSO Framework (2020, background): “…literature supports that internal control fosters firm innovation by means of improved financial reporting quality (Brown & Martinsson, 2019; Zhong, 2018), reduced information asymmetry (Ogneva et al., 2007), lowered cost of capital (Ashbaugh-Skaife et al., 2009; Botosan & Plumlee, 2002),…”