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| Tekijä: | Osma, B. G. Young, S. |
| Otsikko: | R&D expenditure and earnings targets |
| Lehti: | European Accounting Review
2009 : MAY, VOL. 18:1 p. 7-32 |
| Asiasana: | R&D cost control innovation corporate earnings capital markets |
| Kieli: | eng |
| Tiivistelmä: | 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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