Deepak Hegde, from NYU, will present his research. 

Patent Signaling

Patent policy assumes disclosure facilitates imitation. Yet inventors often disclose even when legal protections are weak. We develop a model where, by disclosing earlier, a firm signals a greater commercialization efficiency and thereby deters entry of imitators. Using the American Inventors’ Protection Act of 1999, which allowed accelerated patent disclosures, we show: (i) inventors disclose higher-quality inventions sooner; and (ii) disclosure is faster in fields where rivals learn slowly. Event-study estimates reveal that up to 50 percent of stock-market returns linked to patenting reflect informational gains from disclosure, not legal rights.