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Power of R&D Expert and Narrative Innovation Disclosure

Author

Listed:
  • Minfeng Yu
  • Mengna Fan
  • Gaoliang Tian
  • Yi Si

Abstract

We investigate the impact of the power of senior executives with research and development (R&D) backgrounds on firms’ narrative innovation disclosures. Empirical results demonstrate that the presence of R&D expertise among senior managers significantly amplifies narrative innovation disclosure, with their power positively correlated with disclosure levels. This effect is more pronounced in non‐state‐owned enterprises, firms with lower market positions, those facing intense industry competition and with fewer analyst followings, and those operating in regions with greater market liberalisation. In addition, we find that the power of managers with R&D backgrounds facilitates both innovation input and output, thereby elevating disclosure levels. Enhanced disclosure reduces equity costs and attracts more government subsidies, potentially fostering a conducive environment for sustained innovative activities. Our research contributes to the literature by highlighting the role of R&D‐oriented leadership in shaping corporate innovation strategies, motivating innovation disclosures and fostering the development of innovation ecosystems. We find that the power of R&D experts significantly increases the narrative innovation disclosure of firms, and this effect is more pronounced in non‐state‐owned enterprises, firms with lower market positions, intense industry competition, fewer analyst followings, and those operating in regions of higher marketisation. In addition, we find that managers' R&D‐background facilitates innovation activities and capital rewards.

Suggested Citation

  • Minfeng Yu & Mengna Fan & Gaoliang Tian & Yi Si, 2025. "Power of R&D Expert and Narrative Innovation Disclosure," Australian Accounting Review, CPA Australia, vol. 35(2), pages 121-159, June.
    • Handle: RePEc:bla:ausact:v:35:y:2025:i:2:p:121-159
    DOI: 10.1111/auar.70002
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