Firm size and compositions of R&D expenditures: evidence from a panel of R&D performing manufacturing firms

Characteristics of Corporate R&D Investment in Emerging Markets: Evidence from Manufacturing Industry in China and South Korea

“…Recently, a study conducted by Chiang and Mensah [36] showed that R&D spending is more valuable for firms with larger market shares. Based on an analysis of the top 100 companies of the Chinese electronic and information industry, the findings of Wang [37] suggested that the bigger the firm, the more investments in R&D. In addition, Mishra [38], Xu et al [39], An and Wang [40], and Choi and Lee [41] also drew the same conclusion. Another study by Khoshnevis and Teirlinck [42] showed that large firms present a higher average scale efficiency and technical efficiency, while small-sized firms suffer from scale and technical inefficiency.…”

“…Chinese data were sourced from the China Stock Market & Accounting Research (CSMAR) database and Korean data were sourced from the Data Guide database For facilitating comparison between the two countries, we convert Korean Won to Chinese Yuan by using the Chinese official intermediate exchange rate by the end of each year. On the basis of the literature [27,37,41,70,[77][78][79][80], ordinary least squares (OLS) is used to test the linear relationship between our dependent and independent variables.…”

R&D accounting treatment, firm performance, and market value: Biotech firms case study

“…Qian et al (2012) measure discretionary R&D expenditures to verify the effect of discretionary R&D expenditures and find that discretionary R&D expenditures support the signal hypothesis and not the managerial over-optimism hypothesis. In addition, markets are found to react more favourably to increase in R&D investment of high-tech industry compared to that of low-tech industry (Chan et al, 1990;Eberhart et al, 2004). Wang et al (2016) also find that R&D capitalization leads to higher market value.…”

“…As for pharmaceutical firms, it is said that an average of $800 million is needed to develop one drug (Kaitin, 2003) and R&D investment is constantly needed as research diversification is required (Nivoix & Nguyen, 2018). In terms of firm size, it is found that large firms are likely to invest more in R&D activities (An & Wang, 2010;Choi & Lee, 2018;Khoshnevis & Teirlinck, 2018).…”

Myopia in investment: Seasoned manager’s age and long-term investment distortion

“…Spescha (2018) stated that firm size is a first and central determinant in assessing R&D, because larger firms have an advantage in easier access on financial resource. Choi & Lee (2017) also used this variable to assess the effect of firm size on R&D expenditure types through the shares of sales revenue spent on R&D investments, as small and large firms have different incentives on R&D investment. Furthermore, according to Guidara & Boujelbene (2015) large firm size could limit the discretionary decision of a firm, and this means that firm size could be a driver of investment myopia.…”