Internal information quality and patent‐related innovation

Huang, Kelly; Lao, Brent; McPhee, Gregory P.

doi:10.1111/jbfa.12439

Cited by 30 publications

(14 citation statements)

References 77 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Third, we contribute to the literature on the usefulness of internal information and the relevance of external information environment in decision-making (Heitzman and Huang, 2019;Huang et al, 2020). Rather than focusing on improving the forecasting framework from the perspective of equity investors (Li et al, 2014), we apply the concept of macroeconomic exposure in the context of corporate decision-making and provide corroborating evidence supporting the idea in Shroff et al (2014) external information constitutes an alternative governance mechanism that can be useful for internal decision makers.…”

Section: Introductionmentioning

confidence: 88%

See 1 more Smart Citation

The informational role of macroeconomic exposure in corporate investment efficiency

Chou

2022

View full text Add to dashboard Cite

PurposeThis study explores whether exposure to macroeconomic information provides bellwether firms with information advantages at the macroeconomic level and facilitates managers to utilize such informational advantage for investment decision-making. The author tests whether firms' macroeconomic exposure is associated with sensitivity of their segment-level investments to growth opportunities and how internal and external frictions affect this association cross-sectionally.Design/methodology/approachThis study follows prior research to identify high-macroinformation firms and measures the level of macroexposure based on how closely the firms' underlying business varies with macroeconomic conditions. The main specification is a segment-level regression of investment on growth opportunities and an interaction between growth opportunities and the level of macroeconomic exposure.FindingsThe results indicate a significantly positive association between firms' macroeconomic exposure and sensitivity of segment-level investments to growth opportunities, suggesting that bellwether firms can leverage their greater exposure to macroeconomic and external information to improve the quality of their investment decisions. Further evidence shows that this positive association is decreasing in firms' corporate diversification level and is also decreasing in their foreign operation level, implying that internal and external frictions could limit the information benefits ultimately gained by firms from their macroeconomic exposure.Originality/valueAccounting researchers have recently documented evidence that bellwether firms' management earnings forecasts convey timely information about macroeconomic states, suggesting that managers of certain types of firms are likely to have private macroeconomic information. The main research question in this paper is motivated by incorporating insights derived from recent accounting research findings to shed further light on the impact of firms' macroexposure on their investment decision process.

show abstract

Section: Introductionmentioning

confidence: 88%

Section: Introductionmentioning

confidence: 99%

The informational role of macroeconomic exposure in corporate investment efficiency

Chou

2022

View full text Add to dashboard Cite

show abstract

“…In line with this, Brown and Martinsson (2018) document that the information environment has a similar effect on innovation based on a cross-country setting. Moreover, Huang et al (2019) identify a positive relationship between internal information quality and innovation outputs. Given these findings, we now investigate the possible channel from a corporate transparency perspective.…”

Section: Further Analyzesmentioning

confidence: 96%

Earnings guidance: market pressure or corporate governance? Evidence from corporate innovation in China

Yang

Wang

Chen

2021

NBRI

View full text Add to dashboard Cite

Purpose This study aims to investigate whether and how earnings guidance affects corporate innovation. Design/methodology/approach Exploiting the setting of China, where the Shenzhen Stock Exchange has required all public firms listed on its ChiNext board to issue earnings guidance since 2012, this study uses a difference-in-differences (DID) methodology to examine the effect of earnings guidance on corporate innovation and further conducts cross-sectional analyzes from the information risk and monitoring demand perspectives. Moreover, the authors conduct path analysis to verify the possible channels through which corporate innovation is impeded by market pressure or improved through increased corporate transparency. Findings This study documents a positive relationship between earnings guidance and corporate innovation, as measured by the number of invention patents, indicating that the “corporate governance” hypothesis dominates in China. Cross-sectional analyzes show that this positive effect is more pronounced for firms subject to greater information risk and monitoring demand. Finally, the path analysis further confirms that earnings guidance improves innovation by increasing corporate transparency. Practical implications First, this study captures the bright side of mandatory earnings guidance and suggests that increasing the disclosure frequency can yield benefits for firms. Second, the findings imply that regulations, regardless of what they refer to, should be based on a country’s specific context. Originality/value First, this study provides evidence supporting the “corporate governance” argument based on the context of China and, thus contributes to the debate on earnings guidance. Second, this study enriches the literature on the economic consequences of earnings guidance. Third, the study extends research on the determinants of corporate innovation.

show abstract

“…Prior research shows that better internal information quality is associated with managers decision making in tax avoidance (Gallemore & Labro, 2015), tax-motivated income shifting (McGuire, Rane, & Weaver 2018), capital allocation (Weber & Zheng, 2017), innovation efficiency (Huang, Lao, & McPhee, 2020), and cash holding (Xiong, Zheng, An, & Xu, 2020). High quality internal information allows managers to effectively and efficiently consolidate information provided by subordinates and facilitates managers' decision-making in labor investments from several aspects.…”

Section: Internal Information Environment and Labor Investment Efficiency-hypothesisdevelopmentmentioning

confidence: 99%

Internal Information Environment and Labor Investment Efficiency

Luo

Zhang

2020

AFR

View full text Add to dashboard Cite

This study investigates the relation between internal information environment and labor investment efficiency. We argue that better internal information quality allows managers to obtain more timely and accurate information from subordinates and therefore make better decisions in labor investments. Our results suggest that the labor investments of firms with high quality internal information have less deviation from the optimal level. This association holds for both companies in industries with high and low union coverage.

show abstract

Internal information quality and patent‐related innovation

Cited by 30 publications

References 77 publications

The informational role of macroeconomic exposure in corporate investment efficiency

The informational role of macroeconomic exposure in corporate investment efficiency

Earnings guidance: market pressure or corporate governance? Evidence from corporate innovation in China

Internal Information Environment and Labor Investment Efficiency

Contact Info

Product

Resources

About