Review of Quantitative Finance and Accounting

, Volume 52, Issue 1, pp 253–288 | Cite as

Corporate innovation strategy and disclosure policy

  • Ning JiaEmail author
Original Research


We examine the impact of a firm’s innovation strategy on its disclosure policy. Using a sample of innovation-intensive U.S. firms from 1992 to 2012, we find that firms with higher intensity of exploratory (exploitative) innovation are more (less) inclined to issue management earnings forecasts. These forecasts are generally less (more) optimistic, accurate and precise. We also find that exploration-oriented firms issue more earnings forecasts in order to avoid disclosing proprietary information about their innovation activities. They tend to issue more conservative forecasts in order to avoid large stock price decline. Overall, exploration-oriented firms have a more opaque information environment as manifested in higher analyst earnings forecast error and greater forecast dispersion. Our findings suggest that knowledge-intensive firms appear to incorporate innovation strategy in developing their disclosure policy.


Innovation strategy Exploration Exploitation Management forecasts Proprietary information 

JEL Classification

M40 O30 M41 



The author gratefully acknowledges the financial support of the National Natural Science Foundation of China (Project 71372049) and BNP Paribas-Tsinghua SEM Center for Globalization of Chinese Enterprises. The author remains responsible for any remaining errors or omissions.


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Authors and Affiliations

  1. 1.Weilun Building 201F, School of Economics and ManagementTsinghua UniversityBeijingPeople’s Republic of China

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