Effects of voluntary R&D disclosure on business performance: empirical evidence from Korean manufacturing firms

Disclosing research and development (R&D) information to the outside is a business strategy that can influence the growth of a focal firm and the industry to which it belongs. Voluntary R&D disclosure is intentionally carried out in accordance with the firm's strategic goals, and is made through various disclosure methods. In this study, we analyze the signalling effects of two disclosure methods on business performance: press releases and annual reports. Press releases contain general information related to R&D, while annual reports contain the technological details of R&D. Analysing the firm-level data of 142 firms from 2014 to 2015, we find that voluntary disclosure through annual reports has a positive effect on market share and cash inflow from financing activities, and that press release disclosures exhibit a negative impact on market share. In addition, comparing the effects using elasticity reveals that the annual report is a more effective way to increase market share than a press release is.