Firm life-cycle stage reflects a firm's current strategic direction toward exploration independent of age or size. We provide evidence that young life-cycle firms are particularly vulnerable to negative innovation consequences from financial regulation but do not appear to experience any compensating financial reporting quality (FRQ) benefits. Using a generalized difference-in-differences design around Sarbanes Oxley Act of 2002 (SOX), we document a significant reduction in both research and development (R&D) spending and innovation outputs for young life-cycle stage firms after regulation. Declines in innovation manifest both from the diversion of scarce resources and from the imposition of an organizational culture mismatched to the pursuit of explorative innovation, resulting in a less generalizable and less diversified patent portfolio. However, we find no evidence that improvements to FRQ materialize to offset these costs. Event study analyses suggest that this negative impact was expected by market participants, and postregulation returns confirm this expectation.

中文翻译：

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年轻生命周期公司财务监管的创新和报告后果

公司生命周期阶段反映了公司当前的战略方向，即独立于年龄或规模的探索。我们提供的证据表明，年轻的生命周期公司特别容易受到金融监管带来的负面创新后果的影响，但似乎没有获得任何补偿性财务报告质量 (FRQ) 收益。使用围绕 2002 年萨班斯奥克斯利法案 (SOX) 的广义差异设计，我们记录了监管后年轻生命周期阶段公司的研发 (R&D) 支出和创新产出显着减少。创新的下降既体现在稀缺资源的转移上，也体现在与追求探索性创新不匹配的组织文化上，导致专利组合的普遍性和多样化程度降低。但是，我们没有发现任何证据表明对 FRQ 的改进可以抵消这些成本。事件研究分析表明，这种负面影响是市场参与者预期的，监管后的回报证实了这一预期。