Economic policy uncertainty and narrative R&D disclosures

This study examines the impact of economic policy uncertainty on narrative R&D disclosure. Analyzing 10-K reports from 1997 to 2020, we find that the quantity of R&D disclosure increases with economic policy uncertainty. We also document that firms provide more forward-looking R&D disclosure during uncertain periods. Finally, we find that such impact is more pronounced for the firms with high return volatility and firms in the early-stage of business cycle. We contribute to the literature by showing how managers adjust R&D disclosures in response to economic policy uncertainty.