Pre-grant Patent Disclosure and Analyst Forecast Accuracy

Mehdi Beyhaghi, Pooyan Khashabi, Ali Mohammadi*

*Corresponding author for this work

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Abstract

We examine the relationship between pre-grant patent disclosure and analyst forecast accuracy. We take advantage of the passage of the American Inventor’s Protection Act (1999), which mandates the pre-grant public disclosure of all information in patent application documents within 18 months of the initial filings. We find that, on average, the pre-grant patent disclosure of corporate inventions significantly improves the accuracy of analyst forecasts about the patenting firm and this improvement is greater for firms with higher research and development intensity. Nevertheless, improvements in the accuracy of analysts’ forecasts are smaller when firms issue more original and scientifically broader patents. Also, this effect is weaker for firms in states without legal protection for trade secrets.
Original languageEnglish
JournalManagement Science
Volume69
Issue number5
Pages (from-to)3140-3155
Number of pages16
ISSN0025-1909
DOIs
Publication statusPublished - May 2023

Bibliographical note

Published online: 28 Apr 2022.

Keywords

  • Disclosure
  • Analyst forecast
  • Patent
  • Information asymmetry
  • American Inventor's Protection Act

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