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Annual report readability, analyst coverage and corporate innovation

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  • Yang, Tao
  • Han, Jin

Abstract

This paper systematically explores the impact mechanism of annual report readability on corporate innovation investment using a sample of Shanghai and Shenzhen A-share listed companies from 2014 to 2022. The results indicate that annual report readability significantly promotes corporate innovation investment, an effect achieved by alleviating information asymmetry and reducing investors' information acquisition costs. Analyst coverage positively moderates this relationship by amplifying the innovation effect of annual report readability through professional interpretation and supervisory effects. There is significant heterogeneity in terms of property rights: in state-owned enterprises, due to their resource and policy advantages, the promoting effect of annual report readability on innovation investment is more pronounced, while in private enterprises, this effect is not significant due to financing constraints.

Suggested Citation

  • Yang, Tao & Han, Jin, 2025. "Annual report readability, analyst coverage and corporate innovation," Finance Research Letters, Elsevier, vol. 86(PF).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pf:s1544612325021191
    DOI: 10.1016/j.frl.2025.108866
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    References listed on IDEAS

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