Plausibly Exogenous [1679] - AIPA (09/07/2024)

LHS Variable
Firms’ cost of debt

RHS Variable
Innovation disclosure

Source of Exogenous Variation
Implementation of the American Inventors Protection Act (AIPA): AIPA requires US patent applications filed on and after November 29, 2000 to be published by the government 18 months after the application date. In the pre-AIPA period, patents became public only after they were granted, allowing firms to file as many patents as they wished as a way of trying to avert competition, realizing it would take a long time before the content of their patent applications would be revealed to the market and competitors could learn from it. In contrast, in the post-AIPA period, firms are required to disclose information, even if the patent is not granted eventually.

- Hoffman, Kleimeier, Mimiroglu, and Pennings (2019), “The American Inventors Protection Act: A natural experiment on innovation disclosure and the cost of debt”