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Product market competition and R&D disclosure transparency: evidence from earnings communication conferences in China

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  • Hao, Mengshu
  • He, Yuan

Abstract

This study examines how product market competition influences firms’ R&D disclosure transparency. Using a novel text-based measure derived from the transcripts of earnings communication conferences (ECCs) of Chinese listed firms, we document that increased competition from potential entrants significantly enhances R&D disclosure transparency. This effect is more pronounced among firms that are financially constrained, have stronger incentives to deter new entrants, and face lower proprietary costs. Further analysis shows that greater R&D disclosure transparency is associated with lower financing costs for disclosing firms and reduced R&D activity among their industry peers. Overall, our findings suggest that firms strategically enhance R&D disclosure transparency in response to competitive threats from potential market entrants, balancing the benefits of reduced financing costs and entry deterrence against the potential risks of revealing proprietary information.

Suggested Citation

  • Hao, Mengshu & He, Yuan, 2025. "Product market competition and R&D disclosure transparency: evidence from earnings communication conferences in China," Journal of Contemporary Accounting and Economics, Elsevier, vol. 21(3).
    • Handle: RePEc:eee:jocaae:v:21:y:2025:i:3:s1815566925000347
    DOI: 10.1016/j.jcae.2025.100487
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