英文摘要 |
This paper investigates the effect of accounting conservatism on R&D expenditures and cash holdings. Relative to capital expenditures, R&D expenditures are riskier so that the likelihood of large losses is higher. Thus, because of the characteristic of accounting conservatism that has the asymmetry of more timely recognition of losses than gains, we hypothesize that accounting conservatism can decrease the incentive of managers to engage in R&D activities. However, accounting conservatism can prompt managers to increase more cash holdings when R&D activities are expected. We use electronic firms listed in TSE and OTC from 1995 to 2013. The results indicate that (1) accounting conservatism is negatively related to the likelihood of increasing R&D expenditures relative to capital expenditures, (2) accounting conservatism is positively related to the change in cash holdings in anticipation of R&D expenditures increasing, and (3) the positive relation between accounting conservatism and the change in cash holdings in anticipation of R&D expenditures increasing is stronger than that in anticipation of capital expenditures increasing. Finally, further analyses show the similar findings using panel data models. Furthermore, controlling the effect of internal funds, the results that accounting conservatism can affect R&D expenditures and cash holdings are robust. |