More Disclosure, Fewer Outside Opportunities? Accelerated Patent Disclosure and Market for Managerial Human Capital

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ABSTRACT This paper studies whether and how firms’ enhanced public disclosures of patent filings can spill over to the managerial labor market. Consistent with these disclosures crowding out the demand for directors and senior managers’ (DSMs) private information, I find that their external employment opportunities deteriorate when firms disclose patent information more timely. This effect is more pronounced when the strategic value of the disclosed information is higher and when DSMs face fewer barriers to sharing information. Additionally, the decline in their human capital value is reflected in a diminished role in transferring timely information about technological innovations. Collectively, these results shed light on how public disclosures can shape the managerial labor market by substituting private information flows between firms through DSM ties. Data Availability: The data used in this study are available from the sources indicated herein. JEL Classifications: D23; G38; M12; M41.