Collaborative Innovation and R&D Disclosures: Evidence From Co-PatentsInnovation collaborative et communication d'informations sur la R et D : données relatives à la copropriété de brevets

Abstract

As firms increasingly rely on collaborative innovation to develop new technologies, they face a growing tension between signaling their technological capabilities and protecting sensitive information. This tension is especially important in co-patenting settings, where firms jointly develop innovations and operate in a more interconnected information environment. We examine how firms' narrative R&D disclosures are associated with collaborative innovation, measured by firm-level co-patents (i.e., patents jointly owned by multiple entities). Using data for US public firms from 1996 to 2017, we find that firms with more co-patents tend to disclose less R&D information in 10-K filings, consistent with heightened proprietary cost and negative externality concerns. This negative relationship is stronger with greater competition, weaker intellectual property protection, a greater number of partners, or repeated collaborations with the same partners. However, the relation between co-patenting and R&D disclosures becomes positive when firms collaborate with universities, consistent with signaling incentives. We also find that firms are more likely to highlight collaborations in their 10-Ks when forming new partnerships, working with universities or public firms, or leveraging partners' complementary assets. Overall, our results suggest that firms' R&D disclosure choices are influenced not only by their own proprietary concerns but also by partner-related disclosure externalities and signaling incentives. Our findings highlight the importance of considering collaborative innovation arrangements when interpreting firms' R&D disclosures. They also suggest that managers should tailor R&D disclosure strategies to the characteristics of their collaborations.