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https://doi.org/10.1007/s11156-007-0023-1
Title: | The relation between R&D intensity and future market returns: Does expensing versus capitalization matter? | Authors: | Chan, H.W.H. Faff, R.W. Gharghori, P. Ho, Y.K. |
Keywords: | Accounting for R&D Accounting methods Australian GAAP Capitalization of R&D Future returns Resource-based view |
Issue Date: | 2007 | Citation: | Chan, H.W.H., Faff, R.W., Gharghori, P., Ho, Y.K. (2007). The relation between R&D intensity and future market returns: Does expensing versus capitalization matter?. Review of Quantitative Finance and Accounting 29 (1) : 25-51. ScholarBank@NUS Repository. https://doi.org/10.1007/s11156-007-0023-1 | Abstract: | The Australian accounting environment provides an ideal setting for examining the impact of different accounting treatments of firms' R&D activities on their subsequent returns. Unlike US firms, which can only expense R&D, Australian GAAP permits firms to either expense or capitalize their R&D expenditure. We examine separately the market impact of the R&D intensity of all R&D active firms, 'capitalizers' and 'expensers'. Our results suggest that firms with higher R&D intensity perform better, regardless of the accounting method used, consistent with the resource-based view of the firm. We also find some evidence that firms which expense R&D outperform those which capitalize R&D after controlling for R&D intensity. © 2007 Springer Science+Business Media, LLC. | Source Title: | Review of Quantitative Finance and Accounting | URI: | http://scholarbank.nus.edu.sg/handle/10635/44461 | ISSN: | 0924865X | DOI: | 10.1007/s11156-007-0023-1 |
Appears in Collections: | Staff Publications |
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