Real effects of capitalized research and development expenditures: a leading indicator for future innovation performance?

  • This paper analyzes the relationship between capitalized Research and Development (R&D) expenditures under IFRS and innovation performance measured by patent data. Under IFRS, development expenditures are capitalized when the success of an R&D investment is highly likely. Hence, such capitalization could be a leading indicator for future innovation performance. We analyze this question based on a hand-collected sample of R&D capitalization data under IFRS and patent data from the European Patent Office’s Worldwide Patent Statistical Database. We find that the capitalization rate of R&D is positively related to future patent applications and citations as measures of future innovation performance. We also find a positive association with measures of future financial performance. The results imply that the rate of R&D capitalization is informative and can be considered a leading indicator for future innovation performance.

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Metadaten
Author:Wolfgang HerbGND, Maria LotzeGND, Wolfgang SchultzeORCiDGND, Philipp Sandner
Frontdoor URLhttps://opus.bibliothek.uni-augsburg.de/opus4/115133
ISSN:0924-865XOPAC
ISSN:1573-7179OPAC
Parent Title (English):Review of Quantitative Finance and Accounting
Publisher:Springer Science and Business Media LLC
Type:Article
Language:English
Year of first Publication:2024
Publishing Institution:Universität Augsburg
Release Date:2024/09/03
DOI:https://doi.org/10.1007/s11156-024-01310-3
Institutes:Wirtschaftswissenschaftliche Fakultät
Wirtschaftswissenschaftliche Fakultät / Institut für Betriebswirtschaftslehre
Wirtschaftswissenschaftliche Fakultät / Institut für Betriebswirtschaftslehre / Lehrstuhl für Wirtschaftsprüfung und Controlling
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Latest Publications (not yet published in print):Aktuelle Publikationen (noch nicht gedruckt erschienen)
Licence (German):CC-BY 4.0: Creative Commons: Namensnennung (mit Print on Demand)