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The disclosure function of the U.S. patent system: evidence from the PTDL program and extreme snowfall

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  • Tim Martens

    (Bocconi University)

Abstract

Are retail investors using uncurated disclosures in form of patents for their investment decisions? This study uses the investment decisions of retail investors and variation in the local availability of patent information to answer this question. The variation comes from changes in the locations of U.S. Patent and Trademark Depository Libraries over time. I find a strong increase in the local trading volume of stocks after the release of a patent in counties that have easier access to patent information. In addition, trades made by retail investors with easier access to this information yield higher returns, compared to trades made by other investors. These results indicate that disclosures of the U.S. Patent and Trademark Office facilitate the dissemination of patent information to retail investors. Furthermore, these results suggest that retail investors complement traditional curated disclosures with uncurated disclosures in form of patents.

Suggested Citation

  • Tim Martens, 2023. "The disclosure function of the U.S. patent system: evidence from the PTDL program and extreme snowfall," Review of Accounting Studies, Springer, vol. 28(1), pages 237-264, March.
    • Handle: RePEc:spr:reaccs:v:28:y:2023:i:1:d:10.1007_s11142-021-09641-5
    DOI: 10.1007/s11142-021-09641-5
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    More about this item

    Keywords

    Corporate disclosure; Information and knowledge; Innovation; Communication; Diffusion processes;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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