Does the annual reports risk information disclosure enhance corporate innovation? Evidence from China

Given the substantial relevance of corporate innovation, it is essential to investigate the impact of annual report risk information disclosure on corporate innovation. This study empirically explores the effect of annual report risk information disclosure on the extent of corporate innovation, utilising data from publicly listed companies in China from 2013 to 2023. The findings indicate that annual report risk disclosure significantly enhances corporate innovation. Mediation analysis reveals that availability of credit resources and managerial myopia mediate the relationship between annual report risk disclosure and corporate innovation. Additionally, moderating effect analysis shows that the institutional environment positively influences the relationship between annual report risk disclosure and corporate innovation. Notably, the favourable correlation between annual report risk disclosure and corporate innovation is particularly significant in non-state-owned enterprises and among firms with high levels of ESG tone consistency. Therefore, policy-making agencies should prioritise promoting enterprise innovation through the dissemination of annual report risk information and enhance support mechanisms for enterprise risk information disclosure.