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A Study On R&D Expenditure And Corporate Value Of Chinese High-Tech Industry

Author

Listed:
  • CHEN, Guan-Chih

    (Department of Insurance and Finance, National Taichung University of Science and Technology, Taichung, Taiwan. Author-Name: LI, Hexuan
    Korea Woosuk University, Korea.)

  • TSAO, Shuling

    (Department of International Business Administration, Wenzao Ursuline University of Languages, Kaohsiung Taiwan.)

Abstract

This paper examines the impact of research and development (R&D) expenditure, R&D capitalized expenditure and expensed expenditure on the corporate value. Through the exposition of R&D expenditure affect relevance of corporate value after the Chinese New Accounting Standards, it can be found that R&D expenditure information has a positive effect on share price. The disclosure of information on R&D expenditure has a positive relevance to corporate value means that the disclosure of R&D expenditure information can improve the value relevance of accounting information. Investors give positive value to the R&D capitalized and expensed expenditure, but R&D capitalized expenditure has a greater effect on investors than R&D expensed expenditure. At the same time, the normative degree of R&D expenditure disclosure has a significant positive effect on the stock price, which shows that the disclosure of R&D expenditure information can improve the value relevance of accounting information.

Suggested Citation

  • CHEN, Guan-Chih & TSAO, Shuling, 2019. "A Study On R&D Expenditure And Corporate Value Of Chinese High-Tech Industry," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 23(4), pages 39-51, December.
    • Handle: RePEc:vls:finstu:v:23:y:2019:i:4:p:39-51
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    References listed on IDEAS

    as
    1. Hu, Albert Guangzhou & Jefferson, Gary H., 2004. "Returns to research and development in Chinese industry: Evidence from state-owned enterprises in Beijing," China Economic Review, Elsevier, vol. 15(1), pages 86-107, January.
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    3. Jeongsik Lee & Byung-Cheol Kim, 2013. "The Relationship between Innovation and Market Share: Evidence from the Global LCD Industry," Industry and Innovation, Taylor & Francis Journals, vol. 20(1), pages 1-21, January.
    4. Anne Cazavan-Jeny & Thomas Jeanjean, 2006. "The negative impact of R&D capitalization: A value relevance approach," European Accounting Review, Taylor & Francis Journals, vol. 15(1), pages 37-61.
    5. Lev, Baruch & Sougiannis, Theodore, 1996. "The capitalization, amortization, and value-relevance of R&D," Journal of Accounting and Economics, Elsevier, vol. 21(1), pages 107-138, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Chinese High-tech industry; R&D capitalized expenditure; corporate value;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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