Signaling innovation: The nontax benefits of claiming R&D tax credits

• 成果类型: Article
• 署名作者: Hepfer, Bradford F.; Judd, Hannah W.; Rice, Sarah C.
• 署名单位: Texas A&M University System; Texas A&M University College Station; Brigham Young University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2024.101718
• 发表日期: 2025
• 关键词: TEXTUAL ANALYSIS; JOBS Act; IPO; performance; incentives; MARKET; Aggressiveness; reputation; investors; losses

摘要

Using the IPO setting, we test whether firms signal the quality of their investments in innovation activities by claiming R&D tax credits. We find the presence and amount of the R&D credit are each associated with lower information asymmetry and with higher investor demand at IPO. Conservatively, we estimate that sample firms realize additional IPO proceeds of 32-45 percent of their creditable R&D expenditures, indicating economically significant non-tax benefits associated with the R&D credit. We verify the R&D credit signal by showing its positive association with firms' future patenting activity, patent citations, and post-IPO stock returns. Results from these tests are concentrated among firms limited in their ability to obtain tax benefits from R&D credits, consistent with the R&D credit providing nontax benefits as a signal of innovation investment quality.