The Motive Of Innovation Information Disclosure By Listed Companies In China

The ability to innovate has become the key factor of survival and development for an enterprise in the innovative market. The competition of product variety and quality becomes fiercer, with product replaced more and more fast. Correspondingly, the enterprises’R&D spending accounted for the portion of total expenditure is also growing. As the experience of western countries, enterprises’investing largely in innovation impels technology to progress, economic to grow. China proposed "to actively promote the economic growth mode from extensive to intensive" in the 1990s, requiring enterprises to enhance the capacity of independent innovation, improve technology-based economy to progress. Therefore, innovation activities have become especially important for listed companies to add value and enhance their ability to survive.The innovation capability is extremely necessary for enterprises to enhance their competiveness, but due to features such as high input cost、taking effect later, how to encourage enterprises to innovate is still a global problem. Studies have shown that enterprises would consider the risk and return of their innovation activities, for the risk is a key factor. As the innovation activity to create value with a high degree of uncertainty and earnings to be reduced result from R&D expensed. The risk of innovate for investors is big. Meanwhile, the lack of system about innovation information disclosure which results in non-standard disclosure further exacerbates the risk in china.With the continuous development of capital market, it is more and more important to optimize the allocation and protect investors’interest from being hurt, especially to correctly assess the value of listed companies, which ask accounting information to be disclosed adequately. Although the innovative behavior is becoming increasingly important for enterprises, "the accounting standards for enterprises" in 2001 required R&D spending in general to be recognized as expense, with no any requirement in disclosing the information on innovation. Therefore some enterprises disclosed innovative information in the financial report voluntarily and irregularly. "The new accounting standard" carried out in 2007 makes a distinction between research and development, requiring enterprises to recognize expenditure in research stage as expense and capitalize development expenditure, in addition, listed companies should illustrate the R&D condition in the financial report. The SFC also issued a "listed companies should work well on the annual report in 2007" in the December 28,2007. The notice required the listed company should disclosed detail about technical and R&D investment in "Board Report". What about the condition of innovation disclosure from then on? What should be improved by government? Whether is the innovation disclosure regularly? Which factors would affect the disclosure? Whether is the disclosure effective?In the empirical literature, business innovation behavior and innovation output of innovation is usually divided into two aspects of investment, and innovation investment is more common in research and development (Research & Development, referred to as the R & D) expenditure to measure. Foreign policy environment for innovation little research, most studies have focused on disclosure and accounting policy choice. There Innovations disclosure of the enterprise value. If Hirschey, Weygandt (1985) use Tobin’s Q value of the information on R & D behavior of the added value of enterprise value. Lev, Sougiannis (1996) also proved that R & D investment in information disclosure on the positive impact of enterprise revenues.Innovative behavior of domestic information about the company’s perspective is also more concentrated in R & D disclosure of information, but most researchers did not put information on the R & D and innovation information to distinguish between acts. There is an important current research issues worthy of discussion is how to define and measure business innovation behavior. R & D investment is the main manifestations of innovative behavior, which includes not only investment in R & D investment within the company, should also include investments outside the company, such as the acquisition of innovative enterprises. Broad understanding of innovative behavior can be any new management, new market, new product launches and so on. All in all innovation is to increase the competitiveness of companies of any improvement measures. Based on this information to discuss the disclosure of innovation behavior is more reasonable.This study investigates management incentive to disclose non-financial indicators concerning innovation in high-technology industries and the usefulness of the disclosure. We find that firms increase disclosures of innovation when current earnings are less informative, or when future earnings are more uncertain. Firms increase disclosure in response to investor information demands when accounting data are less useful in assessing firm value. We also find that disclosures of innovation are positively associated with the firm’s future sales growth, profitability, and stock returns, after controlling for current performance and other factors known to influence future performance.According to the above ideas, the structure of this paper is as follows:Chapter one:Introduction. It includes the research background, purpose and significance of this research, research methods, paper innovations and inadequacies. Normative analysis and empirical study are adopted in this paper. And the innovation of this paper is defining more kinds of information that related to companies’innovation behaviors, because the current research on the information of innovation behavior is limited to R & D information. The shortage of this paper is not giving a practical solution to having companies make full disclosure of all businesses innovative behaviors voluntarily, but there is some advice.Chapter two:Theory Introduction. This chapter explains the theory of information disclosure based on innovative behaviors. It includes:pointing out what can be called innovative behavior; by defining the concept, telling the scope of innovative behaviors; introducing theory of accounting information disclosure; comparative analysis of international researches on information disclosure of innovative behaviors.Chapter three:Current situation Analysis. This chapter gives an overview of the current situation of information disclosure about companies’innovative behaviors.According to Jiterary works related to the subject of this paper, we find the fact that the act of information disclosure of innovation behaviors is not very irregular. By defining the general public listed companies and high-tech companies, this chapter gives separate descriptions of current situation of information disclosure about companies’innovative behaviors. Finally, there is an overall status quo analysis about information disclosure of innovative behaviors of listed companies.Chapter four:Empirical analysis. Firstly, this chapter analyzing factors that affect the information disclosure of listed companies’innovative behaviors. And then describes how the model and variables are setting, samples selecting, data collecting. Through empirical analysis, this chapter tells how the information disclosure of innovative behaviors affects the intrinsic value of listed companies; examines the information disclosure of listed companies’is important or not.Chapter five:Conclusions and suggestions. According to empirical results, this chapter gives some proposals.Main contributions of this paper:When many literary works consider the R & D expenditures as the measuring of innovative behaviors, this paper introduces a general and composite index of information disclosure of innovative behaviors, which not only reflect s the R & D behavior, but also reflects other innovative behaviors such as management innovation and so on.