Information Disclosure And Enterprises’ R&D Expense

China’s capital market has been one of the biggest capital markets after more than20years’ rapid development, but the problem of weak market efficiency is still not effectively resolved. Information asymmetry and incomplete information are considered to be important factors affecting the market efficiency, so information disclosure systems are designed to solve such information problems. Along with the deepening reform of China’s capital market, investors’ information demand is increasing, the regulator continually strengthens the disclosure rules and the content requirements. One of the significant trends is that a lot of non-financial information appears beyond the traditional financial report, these information passes more content related to the value of the company to investors. Because most of non-financial information is qualitative described, and lack of data resources, such charactoers hinder the development of domestic academic research.Based on the actual situations of China’s capital market, this thesis focuses on the information in annual reports of the listed companies in the A-share market, especially on the non-financial information. The following problems have been deeply studied:how to use the method of content analysis to effectively measure the non-financial information in the annual reports of listed companies? Besides the existed measure of financial information quality, whether there is other new measure more suitable for the actual situation of China’s capital market? Financial information and non-financial information are disclosed concurrently in the annual report, so whether and how a company’s financial information quality can affect its non-financial information disclosure? How does information disclosure affect its economic consequences, such as R&D expense? Will other company decisions affect the role of information disclosure? These issues are all definitely worth exploring.This thesis is organized with six chapters to discuss and analyse above issues. The conclusions are as followed. Firstly, the absolute value of abnormal auditing fee has a more significant and stable relationship with all measures of financial information quality than the level value, as the widespread phenomenon of inadequate auditing fee will cause the failure of audit supervision, which turns out worse financial information quality. So the absolute value is more suitable for measure of financial information quality than the level value. Secondly, this thesis uses the forward-looking information on behalf of the non-financial information, extracts and analyses the non-financial information by VBA programs, and then gets a database of non-financial information, which can be use in the large sample Empirical research. Thirdly, financial information quality can affect the non-financial disclosure by decreasing the agent cost, which is called as incentive role. The financial information quality can increase the correlation between the corporate value and the non-financial information disclosure, which is named as verification role. Finally, the improve of the quality of information disclosure can huff the expense of R&D through more external financing and less agent cost, which reflect the valuation role and incentive role. And the valuation effect is more significant in companies with less cash holdings beforeahead.This thesis has some innovation points. Firstly, a new measure of financial information is validated, and some VBA programs are designed to extract and analyse the non-financial information in annual reports, which have been proved to be efficient and repeatable. Secondly, the effect of financial quality on non-financial disclosure has supplemented the research on the correlation between different information, voluntary disclosure motivation, etc. Thirdly, the thesis confirms the valuation role and the incentive role of information disclosure, the substitutability between the cash holding policy and the information disclosure policy, which are scare in existed studies.Based on the above conclusions, policy recommendations are proposed. Firstly, the effectiveness and reliability of non financial information should be paid more attention to, meanwhile increasing the requirement of content coverage. Secondly, we should strengthen the infrastructure of capital market, improve the effectiveness of stock pricing, emphasize the positive role of information disclosure in improving the efficiency of capital allocation, and avoid the distortion of capital allocation caused by administrative intervention.