The Effect of R&amp;D Investments on Market Value of Firms: Evidence from the U.S., Germany, and Japan

Bae, Sung C.; Kim, Dongnyoung

doi:10.1108/1525383x200300016

Cited by 76 publications

(71 citation statements)

References 21 publications

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“…Despite shortcomings, correlation and multiple regression analyses have customarily been employed to examine R&D contributions (Morbey, 1989;Morbey and Reithner, 1990;Bae and Kim, 2003;Connolly and Hirschey, 2005;Huang and Liu, 2005). Both methods assume the relationship between R&D intensity and firm performance is linear.…”

Section: Literature Reviewmentioning

confidence: 99%

R&D intensity, firm performance and the identification of the threshold: fresh evidence from the panel threshold regression model

et al. 2010

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This article tests whether there is an optimal level of research and development (R&D) intensity at which point a firm is able to maximize its performance. An advanced panel threshold regression model is employed to investigate the panel threshold effect of R&D intensity on firm performance among publicly traded Taiwan information technology and electronic firms. The results confirm that a single-threshold effect does exist and show an inverted-U correlation between R&D intensity and firm performance. This article demonstrates that it is possible to identify the definitive level beyond which a further increase in R&D expenditure does not yield proportional rewards. Some important policy implications emerge from the findings

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Section: Literature Reviewmentioning

confidence: 99%

R&D intensity, firm performance and the identification of the threshold: fresh evidence from the panel threshold regression model

et al. 2010

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“…Among those, for overseas studies that report that R&D expenditures have a positive(+) effect on firm value, there are Morck et al (1988), Chan et al (1990), Connolly and Hirschey (1990), Morck and Yeung (1991), Doukas and Switzer (1992), Chauvin and Hirschey (1993), Szewczyk et al (1996), Chen and Kim (1997), Bae and Kim (2003), and Everhart et al…”

Section: Randd and Firm Valuementioning

confidence: 99%

The Effects of Research and Development Expenditure on the Firm Value: Focusing on the Portfolio's Excess Return

Choi¹,

Kim²

2017

Asia Pacific Journal of Business Review

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To analyze the effects of R&D expenditure on the firm value of Korean firms, we classified portfolios based on R&D activity levels. After that, we conducted a time-series analysis to assess excess returns from the portfolios. To carry out such an analysis, an empirical analysis of excess returns in the capital market was performed by using the monthly earning rate of stocks from 2000 to 2013. The purpose of this research is to provide basic data on investment to stakeholders in the capital market by analyzing the effects of R&D on the firm value and to overcome scholarly limitations by offering a new model of analysis. The criteria for classifying the portfolios were based on R&D expenditure levels. The analysis models follow the Fama-French Three-Factor Model and the Carhart Four-Factor Model. The analyses results are as follows. Extrapolating monthly profit rates based on R&D expenditure levels, portfolios with low R&D expenditures showed higher earning rates than those with high R&D expenditures. This suggests that high R&D expenditures did not translate into high earning rates. The investor depreciates the R&D expenditures related profitability and the possibility of success in the market, leading to falls in stock prices and a failure to give a positive effect on the firm value. Our research differs from the previous investigations as we carried out an empirical analysis based on the actual investors' attitudes about R&D expenditures and how these can generate excess earnings. Our research results show that the data related to R&D expenditure are not reflected fully in the market.

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“…Additionally, an emotionally intelligent leader seeks to increase his business-market value which is positively related to the investment in R&D (Bae and Kim, 2003). The CEO must also be keen to increase his company's growth opportunities based on research and development since this has a positive effect on these opportunities (Yew et al 2006).…”

Section: Hypothesesmentioning

confidence: 99%

Does CEO Emotional Intelligence Affect the Performance of the Company's Research and Development

Azouzi¹,

Ezzi²,

Jarboui³

2016

AFL

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Abstract:This paper, using qualitative and quantitative data, investigates how behavioral aspects of managers (measured by emotional intelligence) impact performance of innovative companies (measured by high investment in research and development). The results obtained clearly show, for these companies, there is a significant and positive relationship between CEO emotional intelligent and their financial, social and environmental performance.

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The Effect of R&D Investments on Market Value of Firms: Evidence from the U.S., Germany, and Japan

Cited by 76 publications

References 21 publications

R&D intensity, firm performance and the identification of the threshold: fresh evidence from the panel threshold regression model

R&D intensity, firm performance and the identification of the threshold: fresh evidence from the panel threshold regression model

The Effects of Research and Development Expenditure on the Firm Value: Focusing on the Portfolio's Excess Return

Does CEO Emotional Intelligence Affect the Performance of the Company's Research and Development

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