Degree

Doctor of Philosophy (PhD)

Department

Accounting

Document Type

Dissertation

Abstract

In the high-stakes environment of technology innovation, this dissertation examines how competitive pressures and legal transparency shape managers’ strategic disclosure and innovation decisions. The first study investigates whether competition from startups—measured as New Entry Threats (NET)—influences technology firms’ decisions to disclose ongoing patent infringement lawsuits in their annual Form 10-K filings. Although all patent litigation cases are publicly available through mandated court filings, SEC Regulation S-K Item 103 and FASB ASC 450 grant managers substantial discretion over whether to disclose these cases in annual Form 10-K filings. This discretion allows firms to omit cases they deem routine or immaterial, creating scope for strategic disclosure decisions. Guided by proprietary-cost and entry-deterrence theories, I test whether managers suppress or amplify litigation disclosures in response to startup competition. Using a sample of U.S. public technology firms from 2004 to 2017, I find that higher NET is associated with a lower likelihood of disclosing individual patent suits in 10-K filings, supporting proprietary-cost theory and demonstrating that firms strategically withhold legal risk information when competitive threats from startups are high. The second study explores whether firms alter their innovation activities in response to peer firms disclosing patent litigation cases in their annual 10-K filing. Linking all verified patent infringement cases from the U.S. Patent and Trademark Office to the subset of firms that voluntarily disclose such cases in 10-K filings, I analyze whether peer litigation transparency via annual 10-K filings affects firms’ subsequent patenting activity. While peer disclosures provide potential signals about technological strengths, vulnerabilities, or contested innovation domains, the results show that peer litigation disclosures do not significantly influence firms’ future patenting behavior. Instead, firms increase patenting following their own litigation exposure, suggesting that direct legal experience, rather than peer transparency, drives innovation responses. Together, the studies highlight that firms’ disclosure and innovation decisions are interdependent outcomes of competitive and legal pressures, reflecting how managers balance transparency against strategic risk.

Date

11-21-2025

Committee Chair

Dr. Kenneth Reichelt

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Available for download on Monday, November 01, 2032

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