Distance to the Technological Frontier and Strategic Innovation Information Interaction

Abstract

Amid global technological competition and innovation‐driven growth, the relationship between a firm's distance to the technological frontier and its innovation disclosure has become crucial for balancing technological advantage with market transparency. This paper focuses on exchange‐based online Q&A platforms as a typical informal disclosure channel. Using investor Q&A data from 2014 to 2023 for Chinese listed manufacturing firms on the Shenzhen and Shanghai Stock Exchange interaction platforms, we find that firms closer to the technological frontier significantly reduce innovation information interaction, consistent with proprietary cost theory. This reduction arises from distance to the international frontier rather than to the domestic industry frontier. In addition, firms closer to the technological frontier face fewer resource constraints, possess greater reputational capital, and command greater market power, all of which characterize firms that depend less on interactive disclosure. Further tests on internal innovation protection and the external IP environment show that the reduction is stronger for firms with richer undisclosed innovation reserves and weaker external IP protection. This study provides practical insights for policymakers to optimize the governance of interaction platforms and balance innovation incentives with information transparency.