From www.sciencedirect.com: Mandatory financial reporting in Europe negatively impacts corporate innovation by reducing the number of innovating firms and average innovation spending, particularly among smaller firms, while total industry-wide innovation spending remains unchanged.

The findings suggest that revealing proprietary information through reporting regulation imposes costs on smaller firms, leading to a concentration of innovative activity among larger firms which can benefit from information spillovers.

Additionally, while reporting mandates appear to deter investment in meaningful innovations, they do not discourage all types of innovation, with some larger firms increasing their patenting activities in response to the regulations.