Tao, R.; Yu, X.; Bae, K. R&D Accrual Accounting for Cash Flow Projections Affects En-Terprise Value. Preprints2023, 2023121626. https://doi.org/10.20944/preprints202312.1626.v1
APA Style
Tao, R., Yu, X., & Bae, K. (2023). R&D Accrual Accounting for Cash Flow Projections Affects En-Terprise Value. Preprints. https://doi.org/10.20944/preprints202312.1626.v1
Chicago/Turabian Style
Tao, R., XiaoYu Yu and KheeSu Bae. 2023 "R&D Accrual Accounting for Cash Flow Projections Affects En-Terprise Value" Preprints. https://doi.org/10.20944/preprints202312.1626.v1
Abstract
This study empirically analyzes how R&D expenditures affect firm value using a regression model for listed firms in Shandong Province, China. The dependent variable is measured by To-bin Q, which measures firm value, and the experimental variable among the independent varia-bles is R&D expenditure. In addition, financial leverage and firm size, which have been found to have a significant impact on firm value in previous studies, were selected as control variables. The study sample consisted of 554 data points analyzed over a nine-year period from 2010 to 2018. Without controlling for variables that affect firm value, the correlation analysis shows that R&D expenditures of listed firms in Shandong Province, China have a significant positive impact on firm value at the 1% level. For a more precise analysis, we ran a multivariate regression analysis controlling for other variables that affect firm value and found that R&D expenditure has a significant positive impact on firm value at the 1% level. These findings suggest that man-agers of listed companies in Shandong Province, China, need to actively engage in R&D activi-ties to increase firm value. Companies in Shandong Province, China, are currently experiencing very strong growth, and this study, which shows that R&D is the key to increasing the value of these companies, can help companies in Shandong formulate their business strategies.
Keywords
Cash Flow, Accrual, Research and development expenses, Enterprise Value, Financial leverage, Business size.
Subject
Business, Economics and Management, Accounting and Taxation
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
