The effect of R&D on future returns and earnings forecasts

• 成果类型: Article
• 署名作者: Donelson, Dain C.; Resutek, Robert J.
• 署名单位: Dartmouth College; University of Texas System; University of Texas Austin
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-011-9179-y
• 发表日期: 2012
• 页码: 848-876
• 关键词: stock; profitability; INFORMATION; accruals; GROWTH; size

摘要

Prior studies attribute the future excess returns of research and development activity (R&D) firms to either compensation for increased risk or to mispricing. We suggest a third explanation and show that neither the level of R&D investment nor the change in R&D investment explains future returns. Rather, the positive future returns that prior studies attribute to R&D investment are actually due to the component of the R&D firm's realized return that is unrelated to R&D investment but present in R&D firms. Our results suggest that the excess returns of R&D firms are part of the larger value/growth anomaly. In addition, we show that while future earnings are positively associated with current R&D, errors in earnings expectations by investors and analysts are not related to R&D investment.