The Valuation of R&amp;D Expenditures in Japan

Nivoix, Sophie; N'Guyen, Pascal; Noma, Mikiharu

doi:10.2139/ssrn.1460450

Cited by 6 publications

(5 citation statements)

References 20 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Additionally, the higher R&D intensity of large firms in Japan has also been documented in Nguyen et al . (). Unlike the other control variables, working capital switches its sign from negative in the capex regressions to positive in the R&D regressions.…”

Section: Resultsmentioning

confidence: 97%

Institutional ownership, cross‐shareholdings and corporate cash reserves in Japan

Nguyên

Rahman

2018

Accounting & Finance

Self Cite

View full text Add to dashboard Cite

Cross-country studies document a negative relation between corporate governance and cash holdings. In contrast, this relation is found to be positive in the United States. In this paper, we examine the case of Japanese firms. Using institutional ownership and cross-shareholdings as the main governance variables, we show that better governance is associated with higher cash balances as in the United States. The reason is that better-governed firms make better investment decisions. Their investments are not driven by excess liquidity and result in higher profitability and higher firm valuation. Overall, our findings indicate that management profligacy is a bigger concern to shareholders than management propensity to hoard cash because of risk aversion.

show abstract

Section: Resultsmentioning

confidence: 97%

Institutional ownership, cross‐shareholdings and corporate cash reserves in Japan

Nguyên

Rahman

2018

Accounting & Finance

Self Cite

View full text Add to dashboard Cite

show abstract

“…Specifically, the value corresponding to the 99th percentile of its distribution is calculated and assigned to all observations falling beyond it. This approach, which is established in innovation research (Baum, Caglayan, and Talavera, ; Nguyen, Nivoix, and Noma, ), reduces the impact of outliers and allows the use of a larger number of observations than would be possible if outliers were deleted. The average sample firm invests, on average, .204% of its sales in R&D outsourcing.…”

Section: Sample and Measuresmentioning

confidence: 99%

Organizing for Inbound Open Innovation: How External Consultants and a Dedicated R&D Unit Influence Product Innovation Performance

Bianchi¹,

Croce²,

Dell’Era³

et al. 2015

J of Product Innov Manag

128

View full text Add to dashboard Cite

Firms increasingly acquire technological knowledge from external sources to improve their innovation performance. This strategic approach is known as inbound open innovation. The existing empirical evidence regarding the impact of inbound open innovation on performance, however, is ambiguous. The equivocal results are due to moderating factors that influence a firm's ability to acquire technological knowledge from external sources and to transform it into innovation outputs. This paper focuses on a relevant yet overlooked category of moderating factors: organization of research and development (R&D). It explores two organizational mechanisms: one informal and external-oriented (involvement of external consultants in R&D activities) and one formalized and internal-oriented (existence of a dedicated R&D unit), in the acquisition of technological knowledge through R&D outsourcing, a particular contractual form for inbound open innovation.Drawing on a capabilities perspective and using a longitudinal dataset of 841 Spanish manufacturing firms observed over the period 1999-2007, this paper provides a fine-grained analysis of the moderating effects of the two organizational mechanisms. The involvement of external consultants in R&D activities strengthens the impact of inbound open innovation on innovation performance by increasing marginal benefits of acquiring external technological knowledge through R&D outsourcing. Moreover, it reduces the level of inbound open innovation to which the highest innovation performance corresponds. Instead, the existence of a dedicated R&D unit makes the firm less sensitive to changes in the level of inbound open innovation, by reducing marginal benefits of acquiring external technological knowledge through R&D outsourcing, and increases the level of inbound open innovation to which the highest innovation performance corresponds.The results regarding the role of informal and formalized R&D organizational mechanisms contribute to research on open innovation and absorptive capacity, and also inform managers as to what organizational mechanism is recommended to acquire external technological knowledge, depending on the objectives that the firm pursues.

show abstract

“…Similarly, Chiao and Hung () find that R&D is mispriced in Taiwan. By contrast, no evidence of R&D mispricing is found in the UK (Al‐Horani et al., ; and Dedman et al., ) or Japan (Nguyen et al., ).…”

mentioning

confidence: 99%

Does the Riskiness of R&D Outweigh Its Benefits? The Perspective of US Private Lenders

Ciftci¹,

Darrough²

2016

Business Fin & Account

View full text Add to dashboard Cite

We investigate the relationship between R&D investments and loan spread. Prior research documents that R&D is associated with greater future benefits and risks, suggesting that the valuation of R&D depends on a tradeoff between the two. Some research finds that bondholders consider that the benefits of R&D outweigh its risks: R&D is negatively associated with bond yields. This is surprising given that debt holders are more concerned about downside risk due to asymmetric payoffs. Using data on private debt from the US, we find an overall positive association between loan spread and R&D intensity, suggesting that the riskiness of R&D appears to outweigh its benefits for private lenders. Furthermore, an asymmetric payoff structure implies that the risks of R&D for lenders increase with default risk. Consistent with this argument, we find a positive association between R&D and loan spread for firms that are smaller, with high default‐risk ratings, unrated (no public debt), or in industries with weaker legal protection. Unrated firms are in the most R&D‐intensive group and make up nearly 60% of the firms with private debt. Consequently, studies that exclude unrated firms are likely to present an incomplete picture of the perspective of debt holders on R&D.

show abstract

The Valuation of R&D Expenditures in Japan

Cited by 6 publications

References 20 publications

Institutional ownership, cross‐shareholdings and corporate cash reserves in Japan

Institutional ownership, cross‐shareholdings and corporate cash reserves in Japan

Organizing for Inbound Open Innovation: How External Consultants and a Dedicated R&D Unit Influence Product Innovation Performance

Does the Riskiness of R&D Outweigh Its Benefits? The Perspective of US Private Lenders

Contact Info

Product

Resources

About