The Real Effects of Accounting on R&D Alliance Formations and Innovation: Evidence from ASC 606

• 成果类型: Article; Early Access
• 署名作者: Cetin, Furkan M.
• 署名单位: University of London; London School Economics & Political Science
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2022-0302
• 发表日期: 2025
• 关键词: Information asymmetry; STRATEGIC ALLIANCES; capital structure; disclosure; MARKET; identification; constraints

摘要

I examine how Accounting Standards Codification (ASC) 606 affects R&D alliance formations and innovation in the drug development industry. ASC 606 alters revenue recognition timing and increases disclosure requirements. I document that firms dependent on R&D alliance revenues accelerate revenue recognition and expand revenue-related disclosures following ASC 606 adoption. These concurrent changes reduce information asymmetry, both between firms and between managers and investors, but only when increased disclosure accompanies accelerated recognition. Consistent with these net reductions in information asymmetry, affected firms raise more equity capital and increase R&D investment. Notably, these firms, which historically acted as technology providers (principals), form more R&D alliances as technology acquirers (partners). Consequently, they exhibit higher innovation output, measured by new patents and drug candidates. This study identifies a specific mechanism through which accounting standards can stimulate innovation: reduced information asymmetry that facilitates strategic R&D alliance formation.