Earnings Component Volatilities: Capital Versus R&D Expenditures

• 成果类型: Article
• 署名作者: Lev, Baruch; Radhakrishnan, Suresh; Tong, Jamie Yixing
• 署名单位: New York University; University of Texas System; University of Texas Dallas; University of Queensland
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.13333
• 发表日期: 2021
• 页码: 1475-1492
• 关键词: OPERATING PERFORMANCE; INNOVATION

摘要

This study examines the relationship between R&D expenditures and product-market, process-cost, and technological innovation/disruption-related uncertainties. For this purpose, the product-market, process-cost, and technological innovation related uncertainties are linked to earnings component volatilities. Specifically, product-market uncertainty is measured by future sales volatility; process-cost uncertainty by future cost of sales volatility; and technological innovation uncertainty by future special items volatility. The results show that the associations between R&D expenditures and future sales and cost of sales volatilities are lower than those of capital expenditures. However, the association between R&D expenditures and future special items volatility is higher than that of capital expenditures. Collectively, these findings provide insights into the debate on capitalizing versus expensing R&D expenditures.