Motivations for Voluntary Public R&D Disclosures

Abstract

By documenting empirical facts, we highlight the importance of voluntary public R&D disclosure and provide guidance for more refined theoretical and empirical treatments of this phenomenon going forward. Focusing on the disclosure of good news, we demonstrate the prevalence of public R&D disclosure; document its variation across industries, firms, and within firms over time; and conduct multivariate analyses to better understand this variation. Three key discoveries provide new insights that can help guide future research: (i) disclosure precedes observable R&D and performance outcomes—it appears to be more than reporting company accomplishments; (ii) increased disclosure is associated with adverse changes to R&D and performance outcomes—suggesting that firms manage negative outcomes by proactively disclosing good news; and (iii) although pharmaceutical firms disclose more than communications firms, the variance in disclosure is less related to R&D and performance outcomes.