Conference Agenda

Using 80 years of patent-level data, we show that unlisted firms are "quietly ahead" of stock market–listed firms in the innovation race. While unlisted firms produced less valuable innovations for much of the twentieth century, they have risen to a leading position in innovation value this century. This reversal is not explained by changes in patent characteristics or by shifts in market multiples applied to those characteristics. Instead, it reflects differences in technology-field allocation: beginning in the 1980s, unlisted firms reallocated R&D toward fields with rising market valuations and away from declining ones. A simple conceptual lens highlights how nimble reallocation toward high-value fields becomes more valuable as technological opportunities grow more dispersed and persistent. Unlisted firms---especially young and first-time patenters---adjust more nimbly to emerging value signals, aided by venture capital. As a result, their share of aggregate R&D value-add has more than tripled since 1985, despite stable patent shares and faster R&D spending growth among listed firms.

This study examines how America Invents Act, particularly its shift from a "first-to-invent" to a "first-inventor-to-file" rule, affects innovation acquisition. Using the Act as a quasi-natural experiment, we find innovative firms became more likely acquisition targets post-AIA. This increased demand is further evidenced by more contested bids, longer deal completions, and higher bid premiums for innovative targets during that time. Acquirers of these targets subsequently reduced their own patenting, indicating a substitution effect between internal and external innovation. The findings reveal a more competitive and less cooperative environment post-AIA, forcing firms to exit the market or acquire innovation through M&As.

We investigate whether corporate inventors, incentivized by annual performance appraisals, engage in opportunistic innovation management by filing excessive low-quality patents during fiscal year-end (FYE) months. For US public firms, we find a 43% surge in patent filings during FYE months compared to other months, and these additional patents exhibit significantly lower quality. Innovation management is more pronounced among inventors facing greater performance pressure. While such behavior initially reduces inventor turnover, it increases inventor turnover in later years, reflecting a tradeoff between short-term performance gains and long-term reputational costs. Finally, innovation management leads to lower future firm performance and stock returns.