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Using textual analysis of a large sample of 10-K filings for US firms, we find a negative relationship between the extent of risk disclosure and corporate innovation as measured by R&D, patents, and citations. By exploiting two exogenous shocks, we find that it is the increase in the extent of risk disclosure rather than a change in fundamental firm risk that reduces corporate innovation. Further analysis shows that the channel for the innovation decline is due to financial constraints, withdoi:10.26226/morressier.5f0c7d3058e581e69b05d032 fatcat:mryfboqpvjebjfdgkj6lstcytm