Step 1: Understand voltage regulation.
Voltage regulation = change in terminal voltage when load is removed:
\[
\text{VR} = \frac{E - V}{V} \times 100
\]
Where:
- $E$ = no-load voltage
- $V$ = full-load voltage
Step 2: Effect of power factor.
At lagging power factor:
- Armature reaction is demagnetizing
- Causes $E>V$ → higher voltage drop
Step 3: Compare to unity.
At unity PF, armature reaction is purely resistive → less voltage drop
Hence, VR is:
- Positive
- Larger than that at unity PF
Conclusion: $\boxed{\text{Positive and more than at unity PF}}$