Research on the Relationship between R&D Textual Disclosure and Profitability

This paper examines how profitability relates to corporate textual R&D disclosure decisions. Using the fixed-effects regression model, we conclude that the number of textual R&D disclosures is negatively correlated with the profitability of the firm. Companies with less profitability are more likely to publish more textual R&D disclosures to divert or confuse investors. In contrast, companies with better profitability will not publish too many textual R&D disclosures because there is no need to distract investors.