Financing needs, financing environment and over-disclose innovation information

Abstract

ABSTRACT Innovation information is an important way for external investors to understand a firm’s innovation capability and future value. Using Chinese A-share listed companies from 2011 to 2021, we examine whether financing needs lead firms to over-disclose innovation information (OII) in their annual reports. The findings indicate that firms with higher financing needs tend to OII. Heterogeneity analysis reveals that the facilitating effect of financing needs on OII is more pronounced among non-state-owned, small, and declining firms, suggesting that heterogeneity of firms’ financing environment is an important moderator of financing needs’ influence on corporate OII.