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http://dx.doi.org/10.5762/KAIS.2018.19.7.174

A Financial Comparison of Corporate Research & Development (R&D) Determinants: The United States and The Republic of Korea  

Kim, Hanjoon (Division of Business Administration, Hoseo University)
Publication Information
Journal of the Korea Academia-Industrial cooperation Society / v.19, no.7, 2018 , pp. 174-182 More about this Journal
Abstract
Given the ongoing debate in many aspects of finance, more attention may need to focus on corporate R&D expenditures. This study empirically tests financial determinants of R&D expenditures for NYSE-listed and KOSPI-listed firms. Three major hypotheses were postulated to test for corporate R&D outlay. First, proposed variables such as one-year lagged R&D expenditures, market value based leverage, profitability and cash holdings showed significant influence on corporate R&D costs for the sample firms. Moreover, financial factors inclusive of squared one-year lagged R&D expenditures, the interaction effect between one-lagged R&D expenditures and high-growth firm, non-debt tax shield, Tobin's q and a dummy variable to explain differences in accounting treatment between the U.S. and Korea, revealed significant differences between the two samples. Finally, in the conditional quantile regression (CQR) analysis for the R&D-related variables in relation to corporate growth rate, it was found that the NYSE-listed firms had a statistically significant linkage between growth potential and one-year lagged R&D expenditures at lower quantile levels. This study may shed new light on identifying financial factors affecting differences between the U.S. market (as an advanced market) and the Korean market (as an emerging market) regarding the optimal level of R&D investments for shareholders.
Keywords
Financial Determinants; Global Financial Turmoil; KOSPI; NYSE; R&D Expenditures;
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Times Cited By KSCI : 1  (Citation Analysis)
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