Using the R&D capitalisation choice to explain the scale benefits of R&D investment

Author:

Wu Hai1,Thomas Anne-Maree2,Wright Sue3ORCID

Affiliation:

1. Research School of Accounting, Australian National University, Canberra, ACT, Australia

2. Independent scholar

3. UTS Business School, University of Technology Sydney, Sydney, NSW, Australia

Abstract

This paper helps explain a ‘puzzle’ about the scale benefits of R&D investment: although larger firms are less efficient innovators, they spend more on R&D investment and earn more from R&D investment. We find evidence suggesting that large firms enjoy a comparative advantage investing in R&D projects with less chance of success, although they do not experience such scale benefits from R&D investments with more chance of success. We capture managers’ evaluation of the chance of success of an R&D investment using an accounting choice to capitalise or expense the R&D investment. Our results have policy implications for the design of efficient and equitable allocations of R&D tax incentives between large and small firms, and for the usefulness to investors of allowing discretion in the accounting treatment of R&D expenditures. JEL Classification: M41, M48

Funder

Accounting and Finance Association of Australia and New Zealand

Publisher

SAGE Publications

Subject

General Business, Management and Accounting

Cited by 5 articles. 订阅此论文施引文献 订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献

1. The response of Australian firms to AASB 138 disallowing the recognition of internally generated identifiable intangibles;Accounting & Finance;2023-04-27

2. Social connections, CEO turnover and corporate policy change;Australian Journal of Management;2022-10-18

3. Corporate innovation and future earnings: does early patent disclosure matter?;Accounting & Finance;2021-09-14

4. Preliminary Feasibility for Public Research and Development Projects;EMERALD POINTS;2021-04-27

5. References;Preliminary Feasibility for Public Research and Development Projects;2021-04-27

同舟云学术

1.学者识别学者识别

2.学术分析学术分析

3.人才评估人才评估

"同舟云学术"是以全球学者为主线,采集、加工和组织学术论文而形成的新型学术文献查询和分析系统,可以对全球学者进行文献检索和人才价值评估。用户可以通过关注某些学科领域的顶尖人物而持续追踪该领域的学科进展和研究前沿。经过近期的数据扩容,当前同舟云学术共收录了国内外主流学术期刊6万余种,收集的期刊论文及会议论文总量共计约1.5亿篇,并以每天添加12000余篇中外论文的速度递增。我们也可以为用户提供个性化、定制化的学者数据。欢迎来电咨询!咨询电话:010-8811{复制后删除}0370

www.globalauthorid.com

TOP

Copyright © 2019-2024 北京同舟云网络信息技术有限公司
京公网安备11010802033243号  京ICP备18003416号-3