 The impact of local corruption on firms' narrative R&D disclosuresRui Huang, Xuejun Jiang, Leonard Leye Li, Louise Yi Lu and Yangxin Yu Journal of Corporate Finance, 2025, vol. 94, issue C Abstract: This study examines the impact of local corruption on firms' narrative research and development (R&D) disclosures in the United States. We find that firms in more corrupt areas include fewer R&D sentences in their 10-K filings, and these sentences contain less numerical and forward-looking information. Our results hold across various measures of local corruption and R&D disclosures and remain robust after controlling for firms' R&D activities, implementing fixed effects, using difference-in-differences tests, and applying instrumental variable analysis. Additionally, the effects are more pronounced for firms with concentrated operations in their headquarters states and for firms whose R&D disclosures closely relate to future earnings. However, they are less pronounced for firms with CEOs politically aligned with the state's incumbent party and when the benefit of resolving market dispersion from firms' R&D disclosure is high. Overall, our findings indicate that local corruption adversely affects firms' narrative R&D disclosures. Keywords: Corruption; Narrative R&D disclosures; Corporate voluntary disclosures; Rent-seeking (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:94:y:2025:i:c:s0929119925001099 DOI: 10.1016/j.jcorpfin.2025.102841 Access Statistics for this article Journal of Corporate Finance is currently edited by A. Poulsen and J. Netter More articles in Journal of Corporate Finance from Elsevier |
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