International Differences in R&D Reporting Practices: a French and Canadian Comparison

Y. DING, H. STOLOWY, G. Entwistle

Advances in International Accounting

2004, vol. 17, pp.55-72

Départements : Comptabilité et Contrôle de Gestion, GREGHEC (CNRS)

This paper compares the research and development (R&D) disclosure practices in France and Canada, as evidenced in the annual reports of 76 French and 110 Canadian listed companies. It finds that Canadian high-tech companies (hardware, software, and biotechnology) disclose significantly more information on their R&D activities than their French counterparts. It also finds a strong link between R&D intensity and R&D disclosure among Canadian high-tech companies. Canadian companies overall are also found to be more likely to use non-financial disclosure as a means to resolve any R&D information asymmetry, while French firms disclose more traditional financial and accounting information. Canadian companies are also more willing than French firms to provide information concerning their future R&D expenditures. These results are consistent with inherent cultural and capital market differences between France and Canada. ln contrast, the study does not find any significant difference in R&D expenditure capitalization policies between French and Canadian firms.