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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| Author: | Wolfgang HerbGND, Maria LotzeGND, Wolfgang SchultzeORCiDGND, Philipp Sandner |
|---|---|
| URN: | urn:nbn:de:bvb:384-opus4-1151331 |
| Frontdoor URL | https://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: | 2025 |
| Publishing Institution: | Universität Augsburg |
| Release Date: | 2024/09/03 |
| Volume: | 64 |
| First Page: | 417 |
| Last Page: | 473 |
| 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 |
| Licence (German): |  CC-BY 4.0: Creative Commons: Namensnennung (mit Print on Demand) |
