The Impact of the Value-relevance of R&;D, Advertising and Human Related Expenditures for Loss Firms

• Main Authors: Yu-Chin Lin, 林于芹
• Other Authors: Feng-Yi Lin
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/7u6p2f

碩士 === 國立臺北科技大學 === 經營管理系碩士班 === 103 === Although earnings is an important information for investors to value firm’s value, the information content of earnings in firms with negative earnings can’t deliver firm’s value to investors sufficiently. Therefore, how to value the value of firms with negative earnings becomes an important issue. There are many firms to report negative earnings continuously in the stock market, and it indicates that investors still have motivation to invest in these firms with negative earnings. Previous studies indicate that there is a significant negative relationship between earnings and market value in firms with negative earnings, and researchers considered that investors value the firm’s value with negative earnings by using book value of equtiy. In addition, considering the intellectual capital activities, research and development (R&;D), advertising and human related activities also can increase the firm’s value. Following scholars started to use R&;D to value negative earnings firms in knowledge-based economies. Therefore, this study investigates the impact of the value-relevance of R&;D, advertising and human related expenditures for loss firms. This study shows that the R&;D, advertising and human related expenditures can reduce the abnormal negative relationship of earnings and market value and increase earnings information in firms with negative earnings. The R&;D, advertising and human related expenditures are important value drivers in loss firms. Moreover, this study is further to mention that the firms with negative earnings are classified with continuous loss year’s numbers, and explains the R&;D, advertising and human related expenditures of different relationship in the different group of continuous loss year’s numbers.