Abstract
We investigate how investor protection resulted from country-level and firm-level governance standards influence the relationship between market disciplines resulted from firm-level accounting disclosure and innovation activities. Employing a sample across 14 emerging markets, evidence confirms that the effects of firm-level accounting disclosure on innovation activities are more important in a country with weaker governance standards and for firm with poor corporate governance. The results suggest that market disciplines can substitute for investor protection.
Highlights
The existing literature shows that innovation contributes to countries’ economic growth (Aghion and Howitt, 2006) and firms are trying to promote innovation (Hoskisson et al, 2002)
We investigate how investor protection resulted from country-level and firm-level governance standards influence the relationship between market disciplines resulted from firm-level accounting disclosure and innovation activities
Our firm-level accounting disclosure and corporate governance data is obtained from the survey data by Credit Lyonnais Securities Asia
Summary
The existing literature shows that innovation contributes to countries’ economic growth (Aghion and Howitt, 2006) and firms are trying to promote innovation (Hoskisson et al, 2002). Abstract We investigate how investor protection resulted from country-level and firm-level governance standards influence the relationship between market disciplines resulted from firm-level accounting disclosure and innovation activities. Employing a sample across 14 emerging markets, evidence confirms that the effects of firm-level accounting disclosure on innovation activities are more important in a country with weaker governance standards and for firm with poor corporate governance.
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