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http://dx.doi.org/10.5762/KAIS.2016.17.7.63

Analysis of R&D Time Lag in impacting Firm Value: GMM- PVAR Study  

Yang, Insun (School of Business Administration, Hongik University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.17, no.7, 2016 , pp. 63-76 More about this Journal
Abstract
Most previous studies found a positive relationship between the value of a firm and its R&D investments. This research measures the impact of the timescale of the R&D investment of a firm on its value using panel vector autoregression. By measuring the time required for R&D to impact the value of a firm, this study demonstrates that the lead time is an essential factor in the analysis of the effect of R&D investment on a firm's value. Our study finds that the length of the lead time varies according to the firm's size, industry concentration, and book to market ratio. Firms with a higher industry concentration show a shorter lead time. Also, firms with a larger size and higher book to market ratio generally show a shorter lead time.
Keywords
R&D Investment; Firm Value; Firm Characteristics; Impulse Response;
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