Company R&D Information Disclosure, Market Returns And Market Volatility

As everyone knows, with the development of the world economy and Chinese economic take-off, the macro level of the nation and the micro level of enterprises pays more and more attention on R&D investment. On the other hand, the rapid development of the national economy and the enterprise core competitive strength to maintain need the technological innovation and product upgrading. But the foundation of these requirements is that to increase countries and enterprises’ R&D investment and to improve the efficiency of R&D. Enterprises need to invest large amounts of funds to the R&D project, so that the providers of funds urgently need to know the actual progress of project, the situation and condition of the project. That requires company to improve the disclosure of R&D relevant information, so that investors can make accurate decisions according to the R&D information.Because of the R&D itself characteristics, such as strong professional, fuzzy standards of disclosure, it has a greater information asymmetry than other investment. Therefore, we choose the R&D information disclosure quality as the research subject. Firstly, we research on R&D information disclosure influence on firm market return and market return volatility. Finally, adding the corporate governance variables to explore the essential reason that impact of R&D information disclosure quality. Based on questions we have drawn the following conclusion:First, there is a significant positive correlation of company R&D information disclosure index and market income, namely the company increase the strength of R&D information disclosure, the company’s market revenue will also increase. When this information effective transfers to investors, investors will expect an accurate expectations and valuation through the company R&D information.Second, there is a significant negative correlation of company R&D information disclosure index and market income volatility. The degree of information asymmetry between the external investors and internal control of the company can greatly alleviate through a comprehensive and standardized R&D information disclosure. Outside investors will make rational the same investment decision according to definite R&D information based on "rational economic man hypothesis", thus avoiding company market return volatility due to the great same of the investment decision.Third, there is a significant positive correlation index of corporate governance and company market returns, and a significant negative correlation with the company market fluctuation. According to the theory of corporate governance, good corporate governance mechanism can effectively reduce the cost of agency. Through the perfect governance mechanism can control the superintendent’s behavior that can reduce the chance to infringe the rights and interests of shareholders. Perfect corporate governance structure can reduce the degree of information asymmetry through the compulsory information disclosure. The low degree of asymmetry will reduce the fluctuation of corporate market returns.Fourth, there is a significant positive correlation of R&D information disclosure index and the corporate governance index. Based on the company managers of their own interests, they have no incentive to disclose company R&D information that the relevant investor needs. Especially the laws and regulations of R&D is very little, and has a strong professional, so the information asymmetry of R&D is more serious. And the perfect corporate governance structure forced internal management to alleviate the existing information asymmetry, resulting in the company improving the quality of R&D information disclosure.Fifth, under the low governance index grouped, the R&D company information disclosure can promote the company market returns more significantly; to reduce the company’s market volatility more significantly too. Because of the high governance index group company that already has the relatively perfect company governance structure and the low governance index group company’s R&D information have bigger promotion space, so the low company governance index group can promote the company market returns more significant and reduce market volatility more significant company because of slight improvement in R&D disclosure.