R&D narrative disclosure, corporate governance and market value: evidence from France

Mehdi Nekhili, Khaled Hussainey, Walid Cheffi, Tawhid Chtioui, Hubert Tchakoute-tchuigoua

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    Abstract

    We investigate the impact of R&D narrative disclosure on the market value of equity for a sample of French companies during the period 2000–2004. Using 3SLS estimation on a panel data of 98 French firms, we find, ceteris paribus, positive (but insignificant) association between R&D voluntary disclosure and the market value of equity. Both R&D intensity and R&D capitalization lead French firms to disclose more R&D narrative information. However, they impact differently the relationship between R&D-related disclosure and market value. Indeed, a positive and significant association is found when we control for R&D capitalization. In contrast, when controlling for R&D intensity, we find a negative association. We also find that equity-based compensation and audit committee independence are the most important drivers for R&D narrative disclosure.
    Original languageEnglish
    Pages (from-to)111-128
    JournalJournal of Applied Business Research
    Volume32
    Issue number1
    Early online date6 Jan 2016
    Publication statusPublished - Jan 2016

    Keywords

    • research and development
    • voluntary disclosure
    • market value
    • corporate governance

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