TY  - JOUR
AB  - A common view is that investors view steady firm-level R&D investment as evidence of the firm's commitment to R&D-based innovation. However, recent research shows that R&D expenditure volatility is positively related to firm performance, suggesting that higher levels of R&D expenditure volatility indicate effective governance of the R&D function. This paper shows that the relationship between R&D expenditure volatility and firm performance is stronger within firms that have higher levels of information asymmetry between the firm and its investors. This finding suggests that investors interpret R&D expenditure volatility as a good thing, and that this form of information takes on more significance in the absence of better sources of evidence. Innovative chemicals companies may reconsider conventional wisdom suggesting that consistent R&D expenditure conveys an emphasis on R&D-based innovation. Instead, firms can explain to investors that significant changes in R&D expenditure indicate that management is proactively managing R&D projects and combating R&D over investment.
AU  - Swift, Tim
DA  - 2014
LA  - eng
IS  - Journal of Business Chemistry
M2  - 15
N1  - Section "Research Paper"
PY  - 2014
SP  - 15-32
T2  - Journal of Business Chemistry
TI  - Proactive R&D management and information disclosure: ramifications for innovative chemicals companies
UR  - https://nbn-resolving.org/urn:nbn:de:hbz:6-33399599303
Y2  - 2024-11-22T09:45:21
ER  -