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Speech Is Silver, but Silence Is Golden: Information Suppression and the Promotion of Innovation

  • 2019.05.10
  • 活动
Speaker: Dr. Alan Kwan (The University of Hong Kong)

Topic:

Speech Is Silver, but Silence Is Golden: Information Suppression and the Promotion of Innovation

 

Time&Date: 

13:00-14:15 pm, 2019/5/17 (Friday)

Venue:

Room 619, Teaching A

Speaker:

Dr. Alan Kwan (The University of Hong Kong)

Abstract: Per Arrow (1962), an innovation is difficult to finance as mere disclosure reduces its value. We study intellectual property (IP) licenses mandatorily disclosed by US public firms. Firms can opt to redact these filings, enabling us to observe the counterfactual to full disclosure. Retrieving the unredacted filings ex post, we find that redactors aim to conceal valuable IP from competition. Markets react positively to redaction. A natural experiment and cross-sectional analyses suggest that investors infer that redaction signals IP worth hiding. By requiring transparency but allowing selective nondisclosure, public markets balance innovators’ need for secrecy and investor protection.