Warrants in the financial management decisions of innovative firms

Abstract

Intangible investments such as R&D are expensed rather than capitalized due to accounting conservatism. Thus, firms with mostly intangible assets are subject to more constraints in external financing than others and need alternatives. I find that they increasingly use equity warrants as a solution by developing a novel data set from textual analysis. Out of 181,425 annual reports submitted to the US Securities and Exchange Commission during 1994–2018, 10,300 discuss the fair value of warrants. The proportion of warrant firms increased from 0.4% in 1994% to 8% in 2018. Logistic regressions confirm that intangible investments and financial constraints explain warrants.

Exploration of Enterprise Financial Management Innovation Based on Accounting Informatization under the Background of Big Data

“…Park, H. analyzes the accounting robustness of the enterprise financial management with the annual reports of the SEC of the U.S.A. from 1994 to 2018 as an example. The results show that the proportion of warrants in enterprise financial management has increased from 0.4% to 8%, indicating that warrants can solve the financial constraints in innovative enterprise management [13]. Chen, X. et al believe that computing technology can effectively reduce the application limitations of enterprise financial informatization construction.…”

Optimization and innovation of enterprise finance and accounting supervision system under big data technology

“…It has been noted that ERP adoption is affected by factors such as top management support and government compatibility support. Literature [13] investigated through data research and found that due to accounting robustness, intangible asset-heavy firms financed themselves with the use of equity warrants as a solution; logistic regression confirms that warrants are explained in terms of intangible investments and financial constraints. Literature [14] describes the Hungarian municipal debt problem and re-examines the state of soft budget constraints (SBC) of local governments in Hungary.…”

Comprehensive Evaluation of Enterprise Financial Management Based on Full-Cost Accounting Economic Management Model

“…With the continuous development of the market economy, social competition is becoming more and more intense, and enterprises are facing more risks and challenges [1][2]. Enterprises need to strengthen financial management to promote the improvement of their economic efficiency, maximize the avoidance of possible financial fraud and other illegal acts, ensure the safety of their assets, and minimize the resulting economic losses [3][4][5]. If you want to enhance the development quality of enterprise financial management, you need to reasonably combine the full-cost accounting economic management model with the accounting standards system and find out the problems that exist in the combination of the two in a timely manner [6][7].…”