ABSTRACT
This chapter examines the theoretical issues concerning the disclosure of R&D information and the disclosure practices of UK companies. Regulatory history and political power struggles were important in the development of disclosure practice in the UK and it is in this setting that the theory and practice are investigated. The main theoretical considerations in the disclosure of R&D information concern the opposing forces which would encourage or discourage disclosure and the related issue of whether regulatory intervention is necessary. In so far as disclosure helps the capital market to value the company it should be encouraged. However, R&D information has the special characteristic of commercial sensitivity. In so far as disclosure benefits competitors, it should produce the correct amount of voluntary disclosure except where a) there are benefits from disclosure which do not accrue to individual companies, or b) the benefits from disclosure are not properly recognized by managers (for example if managers believe the market to suffer from short-termism which does not in fact exist).
