Different kinds of literature have suggested inconsistent answers to motivations behind a firm’s disclosure strategy. Unlike patents, publications do not afford property rights but rather increases the chances of expropriation. A key unanswered question in the literature is: under which condition firms use publications as an instrument to recruit scientists? Drawing on the innovation literature, I argue that when a tight labor market affords scientists higher bargaining power, firms tend to disclose more internal research via publications. To test this hypothesis, I use a novel dataset of 200 million job posts and 1.1 million firm-level publications from AI firms which have been experiencing a tight labor market. By linking firm-level labor demand with firm-level publications, I demonstrate how scientists’ bargaining power increases firm-level research disclosure. Specifically, I document that labor demand increases the number of AI publications, but only in the same fields of increased demands. This relationship is particularly salient when firms need highly skilled scientists (e.g., PhD holders, more skilled individuals). For identification strategy, I exploit the variation in AI exposure at the firm level, which influences firm-level demand for AI talents but not AI publications. Finally, using a novel methodology, I document that the shortage of scientists did not increase the number of patent-paper pairs or simultaneous disclosure of the same research projects in both patents and papers.
Contact: Michael E. Rose