FBA SEMINAR SERIES

The Effect of Regulatory Change for 8-K Disclosures on Corporate Innovation

Prof. Yangyang CHAN, Professor, City University of Hong Kong

 

Date:          12 October 2022 (Wednesday)
Time:         3:00pm – 4:00pm
Venue:      Online via Zoom
Host:          Prof. Feng TANG, Assistant Professor of Accounting
Online registration: https://umac.au1.qualtrics.com/jfe/form/SV_2t9uxN2hyPb5UxM

Registration Deadline: 10 October 2022

 

Abstract

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. 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

Prof. Yangyang CHEN is the professor and acting head of Department of Accountancy in City University of Hong Kong. He received his PhD from University of Melbourne and worked at Hong Kong Polytechnic University and Monash University before joining City University of Hong Kong. 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.

 

All are welcome!