Scale Effect of R&D as Reflected in Earnings and Returns- Evidence from Listed High-tech Firms in Taiwan

• Main Authors: Li-Ru Juang, 莊荔如
• Other Authors: 葉疏
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/af89bd

碩士 === 國立臺灣大學 === 會計學研究所 === 103 === Base on the research design of Ciftci and Cready(2011),this study uses a sample of listed Taiwanese companies that have available data from years 1999-2008 to explore how R&D-related earnings performance, earnings variability and stock return depend upon firm size. The empirical results are mentioned as below: (1) The positive association between the level of future earning and R&D intensity increases with firm size. In addition, larger firm’s R&D investment has less of an impact on earnings variability than small firms. (2) We further show that R&D scale effects flow through into returns, as larger firms R&D investment is associated with lower future returns than that for smaller firms. R&D investment brings both value and risk. Specifically, because of economies of scale, larger R&D efforts are more productive and less uncertain. Larger firms seem to be better positioned than smaller firms to spread or diversify R&D investment risks, so the return premium for smaller firms relative to larger firms is compensation for greater risk for these firms and expected market returns increase.