Ownership structure, voluntary R&D disclosure and market value of firms: the French case

Abstract

R&D disclosure is strategic decision directed at investors. However, voluntary R&D disclosure can lead to a higher proprietary cost and could benefit competitors. The main purpose of the present paper is to determine whether voluntary R&D disclosure impacts the firm's market value. On the basis of 84 French firms studied over the 2000-2004 period, we developed and hand-collected 32 items from annual reports to establish a voluntary R&D disclosure index. Using a three-stage multivariate analysis approach, our results provide some important insights. First, we document that the more the French firms invest in R&D, the larger the amount of R&D-related information they disclose. Second, we show that it is the increase in R&D spending rather than the voluntary R&D disclosure per se that improves the market value of equity. Finally, we find that minority ownership do not affect voluntary R&D disclosure and that family firms are more prone to retain R&D information.

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