search query: @author Young, S. / total: 47
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Author: | Osma, B. G. Young, S. |
Title: | R&D expenditure and earnings targets |
Journal: | European Accounting Review
2009 : MAY, VOL. 18:1 p. 7-32 |
Index terms: | R&D cost control innovation corporate earnings capital markets |
Language: | eng |
Abstract: | The paper investigates whether firms cut R&D spending in response to short-term earnings pressures and how equity markets interpret such behaviour. A large sample of UK firms during 1989-2002 is tested, and it seems that failure to report positive earnings and earnings growth increases the probability of a subsequent cut in R&D spending. Pressure to report positive earnings and earnings growth in the current period, then, leads to contemporaneous cuts in R&D investment. On average, investors appear to place less weight on earnings increases accompanied by unexpected cuts in R&D spending. |
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