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| Author: | Chan, S. H. Martin, J. D. Kensiger, J. W. |
| Title: | Corporate research and development expenditures and share value |
| Journal: | Journal of Financial Economics
1990 : AUG, VOL. 26:2, p. 255-276 |
| Index terms: | SHARE PRICES SHARE VALUATION R&D EARNINGS HIGH TECHNOLOGY INDUSTRIES |
| Language: | eng |
| Abstract: | Share-price responses to 95 announcements of increased R&D spending are significantly positive on average, even when the announcement occurs in the face of an earnings decline. High-technology firms that announce increases in R&D spending experience positive abnormal returns on average, whereas announcements by low-technology firms are associated with negative abnormal returns. Using cross-sectional analyses, it is shown that higher R&D intensity than the industry average leads to larger stock-price increases only for firms in high-technology industries. |
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