Corporate Governance and Its Impact on R&D Investment in Emerging Markets

Corporate R&D activities are inherently risky but also difficult to monitor. Against this background, we examine the impact of ownership concentration and legal shareholder rights protection on corporate R&D investments in emerging markets. Based on a comprehensive sample of publicly listed firms from 24 countries, we find that R&D intensity is lower in firms with (strategic) block ownership, and this effect is more pronounced in countries with stronger shareholder rights protection. This suggests that, similar to the situation in developed economies, dispersed ownership, which allows shareholders to diversify their investment risks, is beneficial for corporate R&D and that this effect is intensified by more developed institutions.     

Financial market development and the effectiveness of R&D investment: Evidence from developed and emerging countries

Does financial market development enhance the effectiveness of R&D investment in an economy? To address this question, we apply three distinct approaches including (i) ordinary least square method, (ii) cross-country instrumental variable regression approach, and (iii) panel regression method. By using a dataset of both developed and emerging countries, we find that financial market development significantly contributes to the effectiveness of total R&D investment. This finding remains robust across different model specifications and individual estimation methods. Our finding provides an important guidance to policy makers in implementing a sound financial environment that can facilitate the total contribution of R&D investment.     

R&D Efforts,Total Factor Productivity,and the Energy Intensity in China

ABSTRACT

This paper first measures the levels and growths of regional TFP in China using a panel dataset of China’s 30 provinces from 1978–2014. It then estimates the effects of R&D on regional TFP and its growth further explores the impact of TFP on China’s energy intensity. We find no evidence that R&D has innovation and spillover effects on TFP and its growth in China’s provinces. Nevertheless, R&D can promote growth in regional TFP by helping to absorb new technologies embodied in FDI and foreign trade. The results indicate that TFP plays a significant role in the decline of China’s energy intensity.     

The Effect of Managerial Incentives to Bear Risk on Corporate Capital Structure and R&D Investment

In this study we use estimates of the sensitivities of managers' portfolios to stock return volatility and stock price to directly test the relationship between managerial incentives to bear risk and two important corporate decisions. We find that as the sensitivity of managers' stock option portfolios to stock return volatility increases firms tend to choose higher debt ratios and make higher levels of R&D investment. These results are even stronger in a subsample of firms with relatively low outside monitoring. For these firms, managerial incentives to bear risk play a particularly pivotal role in determining leverage and R&D investment.     

The value-relevance of R&D and advertising expenditures: Evidence from Korea

This study examines the value-relevance of R&D and advertising expenditures of Korean firms, using a regression model based on the Ohlson [Contemp. Account. Res. (1995) 661] equity-valuation framework. Results indicate that R&D expenditures are positively associated with stock price, suggesting that capitalizing R&D expenditures is appropriate. The association is stronger for the portion of R&D expenditures that is capitalized, rather than expensed, suggesting that investors agree with management that the capitalized expenditures represent greater future economic benefits. Investors also appear to interpret fully expensed R&D expenditures as positive net present-value investments, however, suggesting that these expenditure should also be capitalized. Additional results indicate that advertising expenditures are negatively associated with stock price, and the magnitude of this negative association is similar to the association between other expenses and stock price. These findings suggest that investors believe the economic benefits of advertising expenditures expire in the current period, similar to other expenses.     

并购对企业R&D投资的挤出效应研究——基于并购前后资产负债率变动的视角

创新是企业内涵式的增长方式,并购是企业外延式的增长方式。在资源有限的情况下,企业如何在这两种战略之间进行权衡?本文以2007-2018年沪深A股上市公司为研究样本,发现如果并购引起企业资产负债率增加,则会对并购后的R&D投资形成"财务侵占",从而对研发产生负面影响;这种抑制作用在主并企业存在融资约束的情况下会更加显著;按企业特征划分,这种抑制作用主要存在于小企业和民营企业。研究结果为基于边界条件的并购如何影响企业创新绩效提供了实证证据,同时也为企业进行相关战略变更和投资决策提供了有益参考。     

Vertical merger,R&D collaboration and innovation

This paper studies the effects of vertical merger and R&D collaboration activities on firms' innovation decisions and stock returns based on a continuous-time real option model under market and technological uncertainties. Our analysis confirms vertical merger's benefit in amplifying the potential gain from innovation through eliminating inefficiencies. We show that vertical merger boosts innovation incentives in two ways: it reduces the optimal innovation threshold when firms suspend the project and increases R&D investment when firms launch the project. If vertical merger is not possible, R&D collaboration can improve firms' innovation levels as an alternative decision, but inefficiencies still exist which implies less pronounced stimulation effects. Both vertical merger and R&D collaboration can reduce firms' risk when conducting innovation project and weaken the positive R&D-returns relation and financial constraints-returns relation, while these effects of vertical merger are stronger than those of R&D collaboration.     

The Impact of Corporate Diversification on the Long-Term Stock Return of R&D Increase Announcements

Prior studies have tested the long-term performance of research and development (R&D) spending, but the results are inconclusive. This study extends this line of research and explores the impact of corporate diversification on the long-term stock returns on R&D increase announcements. After controlling for the important variables in explaining the performance of R&D increases, a significantly negative association is found between the degree of corporate diversification and the long-run stock returns on R&D increase announcements. This result suggests that the costs of corporate diversification dominate the benefits regarding corporate diversification, and highlight the important effect a firm's diversification strategy has on the market valuation of R&D innovation.     

Mispricing and risk of R&D investment in European firms

We study whether R&D-intensive firms earn superior stock returns compared to matched size and book-to-market portfolios across several financial markets in Europe. Mispricing can arise if investors are not able to correctly estimate the long-term benefits of R&D investment or whether R&D firms are more risky than others. The results confirm that more innovative firms can earn future excess returns. Stocks listed on continental Europe markets and operating in high-tech sectors are more prone to undervaluation. This can be caused in the first case by information asymmetries that are more severe in bank-based countries. No evidence is found for a different risk pattern of R&D-intensive stocks.     

Limits of tax regulation: Evidence from strategic R&D classification and the R&D tax credit

We investigate a tax avoidance strategy where firms use the ambiguity inherent in tax reporting to classify indirect costs as research and development (R&D) expenditures to take advantage of the R&D tax credit. We label this tax practice “strategic R&D classification”. We find a one standard deviation increase in strategic R&D classification leads, on average, to a 1.7% (1.5%) reduction in GAAP (cash) effective tax rates, suggesting this practice provides significant tax savings. However, we also find strategic R&D classification is related to both the level and changes in uncertain tax benefit liabilities required to be recognized under FIN 48, suggesting this practice comes with financial reporting costs. Our study contributes to the literature by documenting some of the costs and benefits associated with a previously unexplored tax strategy, and highlights the limitations faced by tax authorities in monitoring firms’ R&D tax credit.     

The effect of management incentives and cross-listing status on the accounting treatment of R&D spending

This paper investigates the effect of management incentives and cross-listing status on the accounting treatment of research and development (R&D) spending for a sample of Canadian hi-tech and biopharmaceutical firms. U.S. GAAP adopts an immediate expensing rule for all R&D spending except for software development costs for which technological feasibility has been established. Contrary to the U.S., Canadian and international standard setters recommend capitalization if development costs meet certain criteria. Because those criteria are largely based on management judgment, capitalization of R&D spending is an accounting choice that can be used for income manipulation or signaling.Using a logit model, we examine how the decision to capitalize R&D spending is influenced by the cross-listing status and several other key firm characteristics that are well documented in the accounting literature. We find that the probability of capitalizing R&D spending increases for cross-listed and non-cross-listed firms in the software industry. The probability of capitalizing R&D spending also increases for firms that are more leveraged, more mature, and have higher level of cash flows from operations. However, the probability of capitalizing R&D spending decreases for larger corporations, firms with more concentrated ownership and highly profitable firms. Overall our results indicate a preference for Canadian firms in the software industry to emulate U.S. accounting practices for R&D spending. They also suggest that firms use the decision to capitalize or expense R&D spending as an earning management tool to either meet debt covenants or to smooth income.     

The Relation Among Targets' R&D Activities, Acquirers' Returns, and In-Process R&D in the US

Abstract:  Using a sample of 129 mergers and acquisitions (M&As) in the US between publicly traded acquirers and targets in research and development (R&D) intensive industries over the period of 1994-2004 and a size- and industry-matched sample, we examine the relation among targets' R&D activities, the probability of acquirers' writing-off in-process R&D (IPRD), and acquirers' returns around the time of M&A announcements. We find that firms acquiring targets with higher R&D investments tend to write off some of the acquired R&D assets upon the completion of the M&As. We also find that the median cumulative abnormal return during the three days around M&A announcements for acquirers with subsequent IPRD write-offs is −2.73% while the return for acquirers without IPRD write-offs is −0.60%. This suggests that acquirers' stock returns around M&A announcements are much lower when investors expect acquirers to expense IPRD. The results are consistent with our conjecture that acquirers tend to write-off IPRD when they acquire overvalued targets. We also find that IPRD write-offs do not increase earnings or stock returns of acquirers after M&As, which is inconsistent with an earnings management hypothesis.     

公共投资与私人投资在我国农业增长中的作用及关系研究

在我国农业投资比重面临不断下降的形势下,本文考察了1985-2002年间我国农业投资对农业产出增长的作用,并进一步分析了农业公共投资与私人投资之间的关系,结果表明,农业投资对我国农业增长具有重要作用,农业公共投资与私人投资之间具有长期稳定的均衡关系,并且二者存在单向的因果关系.在此基础上,对结果进行了分析并给出了相应的政策含义.     

Mispricing of Research and Development Investments in a Rapidly Emerging and Electronics-Dominated Market

This paper documents prevailing mispricing of research and development (R&D) investments in the Taiwan stock market, a rapidly emerging and electronics-dominated market. Applying stock return data from July 1988 to June 2005, we observe that R&D-intensive stocks tend to outperform stocks with little or no R&D. The R&D-intensity effect cannot be attributed fully to firm size and seasonal effects. The R&D-associated anomaly not only exists but also persists for up to three years. The market apparently undervalues R&D-intensive firms and overvalues non-R&D-intensive firms. Finally, the R&D anomaly is clearer for firms in the electronics industry after 1996.     

税收优惠方式对研发投入激励效应研究

以我国2014 ～2020年A股上市公司为样本,利用手工搜集整理的独特数据,获取了上市公司实际享受的税率优惠、加计扣除、加速折旧摊销的金额,并以此为基础检验不同税收优惠方式对企业研发投入的激励效应.实证结果表明,税率优惠、加计扣除、加速折旧摊销这三种税收优惠方式都能激励企业加大研发投入,三种税收优惠方式对研发投入的激励...     

The Return to Direct Investment in Private Firms: New Evidence on the Private Equity Premium Puzzle*

This paper uses a novel dataset to analyze the return to direct investments in private firms by pension funds. We have two key findings. First, direct investments in private firms have underperformed public equity by 392 basis points per annum under conservative risk adjustments. Second, initial mispricing, due to over‐optimism or misperceived risk, and subsequent low capital gains seem to explain the gap in returns to private firms. Overall, these findings complement the finding of Moskowitz and Vissing‐Jørgensen (2002) of low returns on entrepreneurial investments and provide new insight into the existence of what they call the private equity premium puzzle: Even professional investors with well‐diversified portfolios like pension funds seem to get a poor risk‐return tradeoff from investing directly in private firms.     

定向增发新股、整体上市与股票价格短期市场表现的实证研究

定向增发新股成为股权分置改革之后中国上市公司股权再融资的主要工具,本文从理论上解释这种现象,并运用中国证券市场定向增发新股、整体上市的数据,对宣告定向增发新股、定向增发新股实现集团公司整体上市的公司股票价格的短期市场表现进行了实证研究。实证研究结果表明,上市公司宣告定向增发新股和宣告定向增发新股实现集团公司整体上市都有正的财富效应,并且上市公司通过向控股股东或控股股东的关联企业定向增发新股实现集团公司整体上市的宣告效应要好于其他类型的定向增发新股的宣告效应。     

商业银行参与PE业务的现状、问题及策略建议

在后危机时代,我国商业银行应积极参与PE业务,实现支持经济可持续增长与拓宽盈利渠道的双赢。现阶段我国商业银行参与PE业务的基本路径可概括为:迂回直投模式、合作模式与间接模式。从外部环境看,我国PE市场发展的税收和政策安排还不够完善,资本市场为PE提供的退出通道较为狭窄,交易透明度有待进一步提高等;而商业银行内部也存在着风险管理、人才筛选等方面的难题。我国商业银行渐进拓展PE业务应制定严格的风险控制导向的业务监督体系和运营操作流程;积极引进和培养专业人才;选择合适的参与方式、投资阶段、投资产业与投资地域等。     

私募股权基金投资网络关系测度实证研究

私募股权基金在联合投资过程中结成了以信任、分享和互利为主要特征的投资网络,本文利用社会网络分析法,从网络密度、捷径距离、网络中心度、结构洞、派系及核心-边缘结构等角度,对私募股权基金联合投资形成的网络结构特征进行测度研究,分析结果表明中国情境下的私募股权基金投资网络是个非凝聚性和地位不均衡的网络,网络地位突出的基金通常拥有较强的网络影响力和联合投资上的合作优势。