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R&D value of Chinese manufacturing listed companies

Author

Listed:
  • An Tongliang
  • Wang Wenyi

Abstract

Purpose - The way to measure the value of an enterprise’s R&D investments remains elusive for theoretical and empirical study on innovation economics. The paper aims to discuss this issue. Design/methodology/approach - This paper expands the asset-value model pioneered by Griliches (1981) and applies it for the first time to the Chinese stock market to calculate the value of R&D investment instilled by Chinese manufacturing listed companies (CMLCs) from 2003 to 2014. Findings - The authors find that: the assets-value model can better explain the enterprise value composition of CMLCs; with equal input, the value of R&D is higher than that of tangible assets, and lower than that of organizational assets; compared with the developed countries, the R&D value of CMLCs is lower; and the R&D value of CMLCs saw a downward trend from 2007 to 2014. Originality/value - Furthermore, by rationally estimating the value of organizational assets and non-tradable shares, and innovatively introducing semi-annual momentum indicators from the perspective of behavioral finance to control the influence of investor sentiment on enterprise value, this paper tries to develop the asset-value model and provides a feasible solution to the problem of measuring the value of Chinese enterprises’ R&D investment.

Suggested Citation

  • An Tongliang & Wang Wenyi, 2018. "R&D value of Chinese manufacturing listed companies," China Political Economy, Emerald Group Publishing Limited, vol. 1(2), pages 241-262, November.
    • Handle: RePEc:eme:cpepps:cpe-10-2018-012
    DOI: 10.1108/CPE-10-2018-012
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