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R&D Intensity (r&d + intensity)
Selected AbstractsThe Impact of R&D Intensity on Demand for Specialist Auditor Services,CONTEMPORARY ACCOUNTING RESEARCH, Issue 1 2005JAYNE M. GODFREY Abstract The audit fee research literature argues that auditors' costs of developing brand name reputations, including top-tier designation and recognition for industry specialization, are compensated through audit fee premiums. Audited firms reduce agency costs by engaging high-quality auditors who monitor the levels and reporting of discretionary expenditures and accruals. In this study we examine whether specialist auditor choice is associated with a particular discretionary expenditure - research and development (R&D). For a large sample of U.S. companies from a range of industries, we find strong evidence that R&D intensity is positively associated with firms' choices of auditors who specialize in auditing R&D contracts. Additionally, we find that R&D intensive firms tend to appoint top-tier auditors. We use simultaneous equations to control for interrelationships between dependent variables in addition to single-equation ordinary least squares (OLS) and logistic regression models. Our results are particularly strong in tests using samples of small firms whose auditor choice is not constrained by the need to appoint a top-tier auditor to ensure the auditor's financial independence from the client. [source] Measuring Distress Risk: The Effect of R&D IntensityTHE JOURNAL OF FINANCE, Issue 6 2007LAUREL A. FRANZEN ABSTRACT Because of upward trends in research and development activity, accounting measures of financial distress have become less accurate. We document that (1) higher research and development spending increases the likelihood of misclassifying solvent firms, (2) adjusting for conservative accounting of research and development increases the number of correctly identified distressed firms, and (3) adjusted measures of distress alleviate previously documented anomalously low returns of large, high distress risk, low book-to-market firms. The results hold after updating stale parameters and under various tax assumptions. Our evidence raises concerns about interpretation of extant literature that relies on accounting measures of distress. [source] R&D Intensity and Acquisitions in High-Technology Industries: Evidence from the US Electronic and Electrical Equipment IndustriesTHE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 1 2000Bruce A. Blonigen Theory suggests R&D intensity and acquisition activity may be either directly or inversely related. However, we know relatively little about which firms are responsible for acquisition activity in high-technology industries, which are not only R&D-intensive, but also have substantial acquisition activity in the United States. Using a panel of 217 US electronic and electrical equipment firms from 1985,93 and limited dependent variable estimation techniques, we find a substantial negative correlation between R&D-intensity and a firm's propensity to acquire. This result is surprisingly robust to numerous sensitivity tests and is significant in both the ,within' and ,between' dimensions of our data. [source] The Influence of Diversification and Market Structure on the R&D Intensity of Large Australian FirmsTHE AUSTRALIAN ECONOMIC REVIEW, Issue 2 2002Mark Rogers This article empirically investigates the determinants of R&D intensity for large Australian firms (1994,1997). The results indicate that more focused firms have higher R&D intensities and that lower levels of industry competition are associated with lower R&D intensities. [source] The Impact of R&D Intensity on Demand for Specialist Auditor Services,CONTEMPORARY ACCOUNTING RESEARCH, Issue 1 2005JAYNE M. GODFREY Abstract The audit fee research literature argues that auditors' costs of developing brand name reputations, including top-tier designation and recognition for industry specialization, are compensated through audit fee premiums. Audited firms reduce agency costs by engaging high-quality auditors who monitor the levels and reporting of discretionary expenditures and accruals. In this study we examine whether specialist auditor choice is associated with a particular discretionary expenditure - research and development (R&D). For a large sample of U.S. companies from a range of industries, we find strong evidence that R&D intensity is positively associated with firms' choices of auditors who specialize in auditing R&D contracts. Additionally, we find that R&D intensive firms tend to appoint top-tier auditors. We use simultaneous equations to control for interrelationships between dependent variables in addition to single-equation ordinary least squares (OLS) and logistic regression models. Our results are particularly strong in tests using samples of small firms whose auditor choice is not constrained by the need to appoint a top-tier auditor to ensure the auditor's financial independence from the client. [source] A Reexamination of the Tradeoff between the Future Benefit and Riskiness of R&D IncreasesJOURNAL OF ACCOUNTING RESEARCH, Issue 1 2008ALLAN EBERHART ABSTRACT Many previous studies document a positive relation between research and development (R&D) and equity value. Though R&D can increase equity value by increasing firm value, it can also increase equity value at the expense of bondholder wealth through an increase in firm risk because equity is analogous to a call option on the underlying firm value. Shi [2003] tests this hypothesis by examining the relation between a firm's R&D intensity and its bond ratings and risk premiums at issuance. His results show that the net effect of R&D is negative for bondholders. We reexamine Shi's [2003] findings and in so doing make three contributions to the literature. First, we find that Shi's [2003] results are sensitive to the method of measuring R&D intensity. When we use what we argue is a better measure of R&D intensity, we find that the net effect of R&D is positive for bondholders. Second, when we use tests that Shi [2003] recognizes are even better than the ones that he uses, we find even stronger evidence of the positive effect of R&D on bondholders. Third, we examine cross-sectional differences in the effect of R&D on debtholders. Consistent with our main finding, we document a negative relation between R&D increases and default risk. The default risk reduction is also more pronounced for firms with higher initial default scores (where the debtholders have more to gain from an R&D increase) and for firms with more bank debt (where the debtholders have greater covenant protection from the possible detriments associated with R&D increases). [source] R&D and subsidies at the firm level: an application of parametric and semiparametric two-step selection modelsJOURNAL OF APPLIED ECONOMETRICS, Issue 6 2008Katrin Hussinger This paper analyzes the effect of public R&D subsidies on firms' private R&D investment per employee and new product sales in German manufacturing. Parametric and semiparametric two-step selection models are applied to this evaluation problem. The results show that the average treatment effect on the treated firms' R&D intensity is positive. The estimated effects are robust with respect to the different selection models. Further results show that publicly induced R&D spending is as productive as private R&D investment in generating new product sales. Copyright © 2008 John Wiley & Sons, Ltd. [source] Price and Nonprice Competition with Endogenous Market StructureJOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 1 2000George Symeonidis This paper examines the effect of the intensity of short-run price competition and other exogenous variables that affect gross profit margins,such as the degree of product differentiation and the consumers' responsiveness to quality,on market structure and on advertising and R&D expenditure. A key result is that more intense short-run competition can lead to lower concentration in industries with high advertising or R&D intensity, unlike exogenous-sunk-cost industries. Also, price competition has a negative effect on advertising or R&D expenditure. A case study is also presented, which is consistent with the theoretical results of the paper. [source] R&D investment as a signal in corporate takeoversMANAGERIAL AND DECISION ECONOMICS, Issue 5 2009M. Pilar Socorro The purpose of this paper is to analyze the effects that takeover threats have on firms' preacquisition R&D intensity. Critics of takeovers usually argue that takeover threats may reduce target firms' R&D investments. However, I find that target firms may increase R&D investment in order to signal their compatibility with the acquiring firm. The identity of the acquired firm depends on the market size and target firms' efficiency and compatibility. Through R&D investments, target firms may affect this result, signaling potential outsiders the kind of competition they may face, and forcing them to accept lower takeover offers. Copyright © 2009 John Wiley & Sons, Ltd. [source] Technological opportunity and the relationship between innovation output and market structureMANAGERIAL AND DECISION ECONOMICS, Issue 3 2005C. Timothy Koeller This study examines influences of technological opportunity on the relationship between market structure and the innovation output of different-size firms. A simultaneous-equations model is specified and estimated separately for technologically progressive and technologically unprogressive industries. The study finds that innovation activities of small firms and large firms bear different relationships to market structure, in part resulting from interindustry differences in technological opportunity. In technologically progressive industries, innovation output (especially of small firms) is lower in the presence of high concentration and is increased substantially by high R&D intensity. Large-firm innovation output has a positive effect on industry concentration, but only in technologically unprogressive industries. Copyright © 2005 John Wiley & Sons, Ltd. [source] Network positioning and R&D activity: a study of Italian groupsR & D MANAGEMENT, Issue 1 2003Igor Filatotchev Traditionally, R&D studies focus on organisational characteristics and internal context factor effects on a firm's R&D activities. This paper extends previous research by analysing firm,level R&D expenditures in the wider context of inter,organisational networks. Using sample of 2002 manufacturing firms in Italy, it provides evidence that R&D intensity is linked to a firm's positioning within an industrial group's hierarchy. Further tests on the antecedents of R&D expenditures are carried out in relation to the effects of firm characteristics and industry factors. Important findings include a significant and positive association between R&D intensity and the firm's size, performance, intangible assets and industry concentration. These findings suggest that, in addition to firm,level factors and its market environment, network resources and organisation may play an important role in driving the intensity of the firm's R&D expenditures. [source] Communication as a determinant of organizational innovationR & D MANAGEMENT, Issue 1 2000Mika Kivimäki This study of 32 small and medium-sized industrial enterprises explored eight distinct aspects of communication, as appraised by the staff (n = 493), and innovative performance, assessed by two indicators: perceived innovation effectiveness and patent statistics obtained from the Patent Register at the National Board of Patents and Registration of Trademarks. The results showed that intra-organizational aspects of communication, such as encouragement of initiatives and critical evaluation of performance, were associated with both indicators of innovative performance. In addition, a participative climate and interaction between the personnel in R&D, marketing and production were related to perceived innovative effectiveness, whereas interaction with clients and other firms related to the number of patents in the organization. The link between communication and innovation was interdependent with the organizational and staff characteristics including the number of personnel, administrative and R&D intensity, the level of vocational training, and the age distribution of the staff. [source] The Influence of Diversification and Market Structure on the R&D Intensity of Large Australian FirmsTHE AUSTRALIAN ECONOMIC REVIEW, Issue 2 2002Mark Rogers This article empirically investigates the determinants of R&D intensity for large Australian firms (1994,1997). The results indicate that more focused firms have higher R&D intensities and that lower levels of industry competition are associated with lower R&D intensities. [source] The Pattern and Determinants of Intra-Industry Trade in Australian ManufacturingTHE AUSTRALIAN ECONOMIC REVIEW, Issue 3 2000Kishor Sharma This paper presents the pattern and determinants of intra-industry trade (IIT) in Australian manufacturing since the late 1970s. The results point to a sharp rise in IIT from the mid 1980s which appears to be linked with an outward-oriented policy. Industry-level analysis indicates that industries which experienced a sharp fall in protection are the industries with the higher levels of IIT. These include textiles, garments, rubber products, and machinery and equipment. An increasing trend in IIT suggests that the short-term adjustment costs associated with trade liberalisation are likely to be lower, and that liberalisation can proceed without huge short-term adjustment costs. Using a logit model the determinants of IIT are investigated. Results indicate that IIT is positively related to product differentiation and scale economies, and negatively related to the levels of protection and foreign ownership in the pre-liberalisation period. In the post-liberalisation period, however, scale economies explain the inter-industry variations in IIT. R&D intensity and close economic integration appear to have no impact on IIT regardless of the nature of the policy regime. [source] R&D Intensity and Acquisitions in High-Technology Industries: Evidence from the US Electronic and Electrical Equipment IndustriesTHE JOURNAL OF INDUSTRIAL ECONOMICS, Issue 1 2000Bruce A. Blonigen Theory suggests R&D intensity and acquisition activity may be either directly or inversely related. However, we know relatively little about which firms are responsible for acquisition activity in high-technology industries, which are not only R&D-intensive, but also have substantial acquisition activity in the United States. Using a panel of 217 US electronic and electrical equipment firms from 1985,93 and limited dependent variable estimation techniques, we find a substantial negative correlation between R&D-intensity and a firm's propensity to acquire. This result is surprisingly robust to numerous sensitivity tests and is significant in both the ,within' and ,between' dimensions of our data. [source] WHAT DETERMINES INDUSTRIAL R&D EXPENDITURE IN THE UK?,THE MANCHESTER SCHOOL, Issue 1 2008BETTINA BECKER In this paper we identify some of the factors behind the comparatively poor R&D performance of the UK in the 1990s, when R&D intensity in the business sector declined consistently. We estimate an econometric model of R&D using a panel of UK manufacturing industries. Our results highlight the importance of industry characteristics such as sales and profitability, product market competition, macroeconomic factors such as interest and exchange rates, and the composition of R&D expenditure and funding. A rise in the share of government-funded R&D or the share of foreign R&D is found to have a positive impact on aggregate R&D expenditure. [source] Future of Economic Growth for South Korea,ASIAN ECONOMIC JOURNAL, Issue 4 2008Byung Woo KimArticle first published online: 11 DEC 200 O41; O53 More than 80 percent of US growth between 1950 and 1993 can be attributed to transition dynamics (increases in R&D intensity and educational attainment), with less than 20 percent of growth deriving from population growth. Similarly, growth accounting shows that 80 percent of economic growth in Korea can be attributed to transition dynamics. However, the specific factors that have moved Korea far from its steady state are significantly different from the factors that have done so for the USA. In addition to the growth rates of the two countries, we also analyzed the (steady-state) level of output per worker to determine where the Korean economy is headed relative to the USA. In 1960, Korea was characterized as poor (0.111) relative to its own steady state (0.765), and incomes were at 11.1 percent of those in the USA. Since then, however, Korea has been growing more rapidly than the USA. In our analysis, we also consider the extreme case where total factor productivity levels converge completely. Interestingly, in this case, the USA and Korea exhibit unconditional convergence similar to what is generally observed in the OECD. As the economy approaches the steady-state income level, however, the growth rate of output per capita will decline. [source] R&D INVESTMENT, CREDIT RATIONING AND SAMPLE SELECTIONBULLETIN OF ECONOMIC RESEARCH, Issue 2 2007Claudio A. Piga D45; G21; G32; E51 ABSTRACT We study whether R&D-intensive firms are liquidity constrained, by modelling their antecedent decision to apply for credit. This sample selection issue is relevant when studying a borrower,lender relationship, as the same factors can influence the decisions of both parties. We find firms with no or low R&D intensity to be less likely to request extra funds. When they do, we observe a higher probability of being denied credit. Such a relationship is not supported by evidence from the R&D-intensive firms. Thus, our findings lend support to the notion of credit constraints being severe only for a sub-sample of innovative firms. Furthermore, the results suggest that the way in which the R&D activity is organized may differentially affect a firm's probability of being credit constrained. [source] China's Sustained Economic Growth: Do Direct R&D Spillovers Matter?CHINA AND WORLD ECONOMY, Issue 5 2010Renai Jiang F21; F23; O30; O47 Abstract Using data from 1986,2005, the present paper estimates the impact of direct knowledge spilled over from G-7 countries on China's economy. We use telephone line penetration rates and personnel flows to estimate the direct spillover effect. Our results show that direct knowledge spillovers through telecommunication networks and personnel flows are important components of international R&D spillovers in China. These direct channels of spillover effectively accelerate China's economic growth. Therefore, China should invest more in human capital and in its telecommunication network to enhance the absorptive capacity of direct R&D spillovers, and to increase communication with other nations, in particular the USA and Japan. More subsidies to domestic R&D research and purchase of intermediate goods will help to raise China's R&D intensity. [source] | ||||||||||||||||||||||