Working Papers

Pre-grant Patent Disclosure and Venture Capital-backed Innovation

Job Market Paper

Abstract: This paper examines the effect of mandatory pre-grant patent publications on the innovation of venture capital (VC)-backed companies. Using the American Inventors Protection Act (AIPA) as a shock that mandated an 18-month pre-grant publication, I find relative improvements in innovation outputs for companies whose pre-AIPA patent applications received more "revise and resubmit" decisions (rejections). Specifically, I interpret the pre-AIPA rejections as a proxy for companies' inability to detect overlapping inventions, or in other words, uncertainty in the scope of protection companies could obtain from patents. My findings thus suggest that pre-grant patent publications generate larger benefits when they can more effectively reduce such uncertainty.

CEO Hedging, Market Timing, and Shareholder Value

Abstract: This paper examines the market timing activities by CEOs in the form of variable forward (VF) contracts. Surrounding the initiation of the Dodd-Frank Act in 2010, I find a decreasing trend in the number of VF contracts. I document large, yet decreasing premiums charged by investment banks on these contracts. Before 2009, Investment banks, on average, charged a 13% premium and a 6.6% premium since 2010. At the aggregate level, investment banks earned $8.94 million on the VF contracts per year before 2009 and $6.9 million per year since 2010. In addition, I separate the insiders by their trading pattern into the groups of opportunistic traders and liquidity traders. For the period before 2010, I find a -2.5% monthly abnormal return following opportunistic traders’ transactions and a -1.3% monthly abnormal return following liquidity traders’ transactions. The abnormal returns become insignificant for both types of traders within the period since 2010. Evidence suggests that there is less inside information involved with insider’s use of VF contracts since 2010.

Work-in-Progress

Antitrust Enforcement and Corporate Innovation

Can Artificial Intelligence Level the Playing Field? Evidence from University Research

Patent Disclosure and Innovation Efficiency, with Mark (Shuai) Ma (University of Pittsburgh) and Yucheng Yang (CUHK)