| Summary: | 碩士 === 元智大學 === 會計學系 === 94 === ABSTRACT
The bio-technology industry is known as the most potential industry in the 21st century, and its annual output value is also amazing. Because of its industry characteristic, R&D investment is the lifeblood of the industry ,and also create high value of the company.In the past research ,we can find that high-technology industry R&D expenditure really has positive impact on firm performance, and influences company future ability. However, there is a small number of research on R&D expenditure impact to Firm Performance in U.S.A. Bio-Technology Industry. So My research focuses on high knowledge intensity of bio-technology industry, and figures out what''s R&D expenditure’s impact to Firm Performance, when does expenditure impact on firm performance become positive after certain periods of time ,and whether market rationally price R&D expenditure informationor not. Finally, My research provides company management and investors for more information in this industry.
My empirical evidence shows that：
1. H1.1 R&D expenditure has positive impact on firm performance in Biotechnology industry.
By studying the financial data of the American Biotechnology from 1986 to 2004, we found that the expenditure of R&D has positive effect on the current firm performance. However, due to the nature of Biotechnology, a large amount of R&D expenditure has negative effects on firm performance over the next few periods with diminishing impacts until the sign of R&D expenditure effects eventually become positive. Therefore, this study supports H1.1 hypothesis. Nevertheless, if we investigate the impact of accumulated R&D expenditures on firm performance over the next 7 time periods, the overall effects are still negative.
2. H1.2 The sign of R&D expenditure impact on firm performance can become positive after certain periods of time.
We found that the sign of R&D expenditure impacts on firm performance will become positive after four time periods (from t to t-3). However, using accumulated R&D expenditures as input, the sign of its impacts on firm performance is still negative using six periods time model. A followup study can be done by using a longer time periods model to learn the exact time it takes to recover the R&D expenditures for the Biotechnology industry.
3. H1.3 The market can rationally price R&D expenditure information.
The market considers the current R&D expenditure can brought good firm performance and is therefore overly optimistic for the current R&D expenditure. The market attitude on current R&D expenditure is irrational. The market holds opposite opinion over the past period R&D expenditure and therefore the irrational pricing condition continued.
However, the market becomes again overly optimistic on the lag 2 and lag 3 time periods R&D expenditure, the sisitotuation of irrational pricing continues. Market continues to show irrational pricing on the lag 4 , lag 5 and lag 6 R&D expenditure. AS the conclusion, the market and overly optimistic on the past 6 time periods R&D expenditure, and is therefore irrlationaly priced.
In additional, by study the accumulated R&D Expenditure ,the market show overly optimistic for the R&D information.
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