Transparency or Opacity? Information Disclosure Strategy from the Innovation Perspective
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| Title | Transparency or Opacity? Information Disclosure Strategy from the Innovation Perspective
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| Author | Yu Lisheng,Wang Zehao,Wang Yanyan and Li Wentao |
| Organization | Xiamen University |
| Email | yulisheng@xmu.edu.cn；zehaowang@stu.xmu.edu.cn；yanyanwang@xmu.edu.cn；wentaoli@stu.xmu.edu.cn |
| Key Words | Firm innovation; Signaling Theory; Proprietary Cost; Similarity; Readability |
| Abstract | Innovation and R&D have the characteristics of high investment, long cycle and high uncertainty, which make the high-innovation enterprises face low transparency and high proprietary cost. On the one hand, in order to satisfy investors and prevent undervaluation caused by information asymmetry, enterprises have the motivation to disclose information. On the other hand, innovation comes with the proprietary cost, which makes the enterprise have the worry of information disclosure being acquired by existing and potential competitors. Using the data of A-share listed companies from 2011 to 2016, we find that the more firm’s innovations, the lower similarity and readability of its MD&A texts. The results show that the management will take into consideration both the value of the enterprise and the competitor's imitative. In further research, we also find that the above results mainly exist in the higher protection of intellectual property rights, fierce competition in the industry and higher degree of financing constraints. |
| Serial Number | WP1466 |
| Time | 2020-01-16 |
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