Co-opetition and Corporate R&D Disclosure: Evidence from Standard-Setting Organizations

55 Pages Posted: 26 Mar 2021 Last revised: 24 May 2021

See all articles by Yangyang Chen

Yangyang Chen

City University of Hong Kong (CityUHK) - Department of Accountancy

Gaoliang Tian

Xi'an Jiaotong University (XJTU)

Xuan Wu

Harbin Institute of Technology, Shenzhen

Zilong Zhang

City University of Hong Kong

Date Written: February 26, 2021

Abstract

We examine whether firms’ co-opetition (i.e., simultaneously competitive and cooperative) behaviors in standard-setting organizations (SSOs) affect their R&D disclosure. We find that firms increase their narrative R&D disclosure to the public after participating in SSOs. The effect of SSO participation on narrative R&D disclosure is more pronounced for firms with a greater ex-ante proprietary cost of disclosure and firms with higher investor information demand. Further analyses show that narrative R&D disclosure increases with the percentage of competitors in the SSO and that SSO participation raises not only the quantity but also the information content of such disclosure. Overall, the findings suggest that co-opetition inside SSOs facilitates the sharing of proprietary R&D information with competitors. This reduces firms’ proprietary cost of disclosure, incentivizing them to disclose more R&D information to the public.

Keywords: Co-opetition, Standard-setting Organizations, Proprietary Information, R&D Disclosure

JEL Classification: L14, L15, M41, O32

Suggested Citation

Chen, Yangyang and Tian, Gaoliang and Wu, Xuan and Zhang, Zilong, Co-opetition and Corporate R&D Disclosure: Evidence from Standard-Setting Organizations (February 26, 2021). Available at SSRN: https://ssrn.com/abstract=3793298 or http://dx.doi.org/10.2139/ssrn.3793298

Yangyang Chen

City University of Hong Kong (CityUHK) - Department of Accountancy ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong
China

Gaoliang Tian

Xi'an Jiaotong University (XJTU) ( email )

26 Xianning W Rd.
Xi'an Jiao Tong University
Xi'an, Shaanxi 710049
China

Xuan Wu

Harbin Institute of Technology, Shenzhen ( email )

University Town
Nanshan District
Shenzhen, Guangdong 518055
China

Zilong Zhang (Contact Author)

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

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