Small innovators: No risk, No return

Stoffman, Noah; Woeppel, Michael; Yavuz, M. Deniz

doi:10.1016/j.jacceco.2022.101492

Cited by 38 publications

(21 citation statements)

References 71 publications

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“…Table 2, panel A, provides descriptive statistics for the sample. Our innovation data comes directly from Kogan et al (2017) and Stoffman et al (2020). Firm‐year observations exhibit an average Number of Patents of 38.6 patents over a two‐year period, or approximately 19.3 patents a year.…”

Section: Resultsmentioning

confidence: 99%

“…The sample begins with innovation data from the Google Patents database detailed in Kogan et al (2017) and extended by Stoffman et al (2020). 5 The Google Patents database contains the history of US patent documents granted by the United States Patent and Trade Office (USPTO) and provides annual information on the patent number, filing date, issue date, and published application date.…”

Section: Measuring Innovation and Ineffective Control Systemsmentioning

confidence: 99%

“…As noted in prior literature (Hall et al 2005), a quantity of patents measure fails to account for patent significance. Specifically, the Market Value of Patents is a firm‐level measure based on future stock market reactions to patents granted in a given year (Kogan et al 2017; Stoffman et al 2020). Patent filing dates are not known to the public on a timely basis.…”

Section: Measuring Innovation and Ineffective Control Systemsmentioning

confidence: 99%

“…6 6 In a simple example, assume Firm A has two patents filed in 2005. One of the patents is granted in 2007 and, according to the methodology in Kogan et al (2017) and Stoffman et al (2020), has a market value of $1 million and the other is granted in 2009 and has a market value of $3 million. We classify Firm A as having a market value of patents filed in 2005 of $4 million. …”

mentioning

confidence: 99%

See 3 more Smart Citations

The Impact of Control Systems on Corporate Innovation†

Miller

Sheneman

Williams

2022

Contemporary Accting Res

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This study examines the impact of control systems on corporate innovation. Innovation is key to firm performance and growth, allowing corporations to stay competitive in their industry. We expect control systems to improve information flows within the firm by allowing managers to better identify and patent their most valuable intellectual property. Despite our prediction that control systems positively impact innovation, a priori, this relation is unclear as these same control systems may create an overly restrictive bureaucratic environment that may mitigate the benefits of effective controls for innovation. Using various measures of control system quality, we find evidence that effective control systems are associated with more innovation. Overall, the results of our study suggest effective control systems are associated with the ability of a firm to leverage its innovative projects. Our results suggest that corporations with effective control systems are more likely to be able to react to market and technology changes by ensuring their best ideas are patented.

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Section: Resultsmentioning

confidence: 99%

Section: Measuring Innovation and Ineffective Control Systemsmentioning

confidence: 99%

Section: Measuring Innovation and Ineffective Control Systemsmentioning

confidence: 99%

mentioning

confidence: 99%

See 2 more Smart Citations

The Impact of Control Systems on Corporate Innovation†

Miller

Sheneman

Williams

2022

Contemporary Accting Res

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“…Information relating to analyst coverage was obtained from the I/B/E/S database. Patent data were acquired from publicly available patent database created by and described in Stoffman et al (2021). Finally, CSR data were collected from the KLD database.…”

Section: Empirical Designmentioning

confidence: 99%

Corporate social responsibility and firm performance: a theory of dual responsibility

Al‐Shammari

Banerjee

Rasheed

2021

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PurposeThe authors aim to develop and test a theory of dual responsibility to explain the relationship between corporate social responsibility (CSR) and firm performance. The authors empirically examine whether firms that meet their economic and social responsibilities simultaneously perform better than firms that fail to do so. In doing so, the authors theoretically extend and empirically test Barney's (2018) call to incorporate the stakeholder perspective with resource-based view (RBV). The authors also examine the moderating effects of firm status on this relationship.Design/methodology/approachThe authors use a longitudinal panel sample of 137 S&P 500 firms and data for the years between 2004 and 2013 collected from multiple data sources. The authors use stochastic frontiers analysis to measure firm capabilities in the areas of R&D, operations and marketing. These capability measures are then used along with CSR measures and a measure of firm status to test the hypotheses of this study. The authors also conducted several robustness checks and various supplementary analyses using different econometrics techniques and different operationalizations of the key variables of interests.FindingsThe results show that firm CSR is positively related to firm performance and that the effect of CSR on performance is stronger for firms with higher levels of R&D capability and operational capability. The authors also find support for the three-way interaction between CSR, economic responsibility and firm status, suggesting that firms high in both social and economic responsibilities and status will enjoy the highest levels of performance.Research limitations/implicationsThe findings of this study are based on large, publicly listed firms in North America. Therefore, their generalizability to other contexts and other types of firms require additional research. The reliance on KLD measures is also a limitation, especially because they have not reported CSR ratings after 2013.Practical implicationsFor practicing managers, the main implication of this study is that an optimal balance between market and nonmarket strategies is key for superior performance.Social implicationsThe continued debate regarding the firm's purpose can be understood by focusing equally on the two main responsibilities of firms: nonsocial responsibility and social responsibility toward all stakeholders.Originality/valueThe study answers the call to incorporate stakeholder theory into the RBV of the firm by highlighting the critical role of firm capabilities in the relationship between CSR and performance. The study also highlights the role that firm status plays in the relationship between market and nonmarket strategies and firm performance.

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Firm innovation and covenant tightness

Novoselov

Stice

et al. 2022

Rev Account Stud

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This study explores the association between firm innovation and loan covenant strictness. We find that lenders construct stricter contracts for firms filing more patents, consistent with lenders imposing more oversight on firms when they enter the commercialization stage after having demonstrated their inventiveness. Our results hold under propensity score matching and entropy balancing, and when exploiting the American Inventors Protection Act as a shock affecting unrelated banks’ access to patent filing information. The relationship we document is stronger when the lender has more expertise and for firms with higher default risk. We demonstrate that borrowers’ patent filings are associated with more future R&D and capital investment and with a higher likelihood of their acquiring firms in the industry of their patent filings. Our results are consistent with the theoretical prediction that lenders interpret patent filings as indicative of high inventive potential that requires stricter discipline and oversight by lenders in order to be converted into actual business success, and with them designing debt contract terms accordingly.

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Small innovators: No risk, No return

Cited by 38 publications

References 71 publications

The Impact of Control Systems on Corporate Innovation†

The Impact of Control Systems on Corporate Innovation†

Corporate social responsibility and firm performance: a theory of dual responsibility

Firm innovation and covenant tightness

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