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

Mehdi Nekhili (), Sabri Boubaker () and Faten Lakhal
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Faten Lakhal: IRG - Institut de Recherche en Gestion - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12

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Abstract: R&D disclosure is a strategic decision directed at investors. However, voluntary R&D disclosure can lead to a higher proprietary cost and may benefit competitors. The main purpose of the present paper is to examine whether voluntary R&D disclosure impacts the firm's market value, and whether it is influenced by ownership structure. Using a sample of 84 French listed firms over the 2000-2004 period, we develop an R&D disclosure index composed of 32 hand-collected items from annual reports. The obtained findings provide some important insights. First, we show that voluntary R&D disclosure improves the market value of equity, suggesting that the benefits from disclosures of R&D activities exceed the disclosure costs. Second, we find that family- and institutional investor-firms are more prone to retain R&D information. Finally, we document that the more French firms invest in R&D, the larger the amount of R&D-related information they disclose. Also, R&D capitalization provides incentives for companies to disseminate more R&D-related information.

Date: 2012-06
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00809226
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Published in International Journal of Business, 2012, Vol. 17 (n° 2), p. 126

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Working Paper: Ownership structure, voluntary R&D disclosure and market value of firms: the French case (2011)
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