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Innovation disclosure in times of uncertainty
Author(s) -
Amore Mario Daniele
Publication year - 2020
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/jems.12390
Subject(s) - vagueness , position (finance) , value (mathematics) , government (linguistics) , accounting , panel data , business , missing data , economics , econometrics , finance , philosophy , linguistics , machine learning , computer science , fuzzy logic
Abstract A recent literature shows that many firms feature missing R&D expenses in their accounting statements. This study explores how economic policy uncertainty affects the decision to disclose innovation‐related information. Empirical analyses on a panel of U.S. listed companies show that policy uncertainty increases the likelihood of missing R&D (as opposed to both positive and zero R&D). This result is more pronounced for firms that enjoy a leadership position in their industry, firms in states subject to a weaker legal protection of internal knowledge, and firms that rely more on government demand. During uncertain times, firms also file patents that exhibit a greater textual vagueness. Finally, the evidence suggests that missing R&D helps firms alleviate the negative impact of policy uncertainty on market value.