Topic: The Effect of Regulatory Change for 8-K Disclosures on Corporate Innovation
Speaker: CHEN Yangyang, Professor, Department of Accountancy, City University of Hong Kong
Host: XU Shen, Associate Professor, Department of Accounting, School of Management, HUST
Time and Date: 14:00-16:00, Sep. 15, 2022 (Thursday)
Platform: Tencent Meeting ID: 368-484-387
Room 107, School of Management
Completeness and timeliness are two properties of firm disclosures desired by investors and promoted by standard setters in their conceptual frameworks of financial reporting. Nevertheless, prior studies suggest that these two properties may have opposing effects on corporate innovation. Exploiting the regulatory change in 2004 for 8-K disclosures as a quasi-natural experiment, we document that enhanced completeness and timeliness of firm disclosures increase firm innovation output. Further, we find that firms allocate more resources to innovation activities after the regulation change. We also find that the increase in innovation output is larger for firms whose managers face higher career risks for innovation failures and firms whose investors experience difficulties in monitoring firm innovation activities. Finally, we show that the increase in innovation output is concentrated in firms that disclose more innovation-related activities after the regulatory change and that firms not only dig deeper in their existing knowledge pool but also explore more outside of it.
Speaker’s Profile:
Prof. CHEN Yangyang joined City University of Hong Kong in 2019. He received his PhD from University of Melbourne and worked at Hong Kong Polytechnic University and Monash University before joining. His research interests are in corporate finance and financial accounting, including management compensation, corporate innovation, audit quality and pricing, earnings management, corporate disclosure, and so on. His works have been published in The Accounting Review, Journal of Accounting Research, Journal of Financial Economics, Journal of Financial and Quantitative Analysis, Contemporary Accounting Research, Review of Accounting Studies etc.
