search query: @author Livnat, J. / total: 18
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| Author: | Ballester, M. Garcia-Ayuso, M. Livnat, J. |
| Title: | The economic value of the R&D intangible asset |
| Journal: | European Accounting Review
2003 : VOL. 12:4, p. 605-633 |
| Index terms: | Accounting Intangible assets R&D |
| Language: | eng |
| Abstract: | This study utilizes firm-specific time-series data to estimate the economic value of the research and development (R&D) expenditures that investors consider an asset to the firm. A Ohlson (1995) model modification is used to estimate the persistence of abnormal earnings, the proportion of current R&D expenditures that represents a source of future benefits to the firm, and the amortization rate of that asset. The firm-specific estimates are also compared with those resulting from an application of a cross-sectional estimation procedure based on all available companies in the sample and industry-specific sub-samples. Results indicate the existence of significant differences in some two-digit SIC code industries between the time-series and the cross-sectional estimates of the parameters and the economic value of the R&D asset. Differences in the capitalization parameter are associated with the growth in R&D, the profitability of the firm, R&D intensity and the concentration of the industry. Differences in the persistence of earnings are related to the concentration ratio. Finally, differences in the estimated economic value of the R&D asset are associated with the profitability of the company as measured by its return on assets. There are also more results presented from further comparisons in the study. |
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