Accounting Conservatism and Corporate R&D Investment: Evidence from Chinese Capital Market

Accounting Conservatism and Corporate R&D Investment: Evidence from Chinese Capital Market


Author:DONG Zhu,ZHANG Xin Journal:Journal of Guangdong University of Finance & Econo Date:2020(1)

Abstract: Using the data of Shanghai and Shenzhen A-share listed companies from 2007 to 2017,this paper investigates the impact of accounting conservatism on R&D investment,and further tests the role played by ownership,heterogeneous institutional investors and information transparencyThe results show that the higher the accounting conservatism is,the less the R&D investment of enterprises is,indicating that accounting conservatism will restrain the R&D investment of enterprises. It is found through further tests based on the nature of ownership that accounting conservatism has a stronger inhibitory effect on R&D investment in non-state-owned enterprises than that in state-owned enterprises; while stable institutional investors and the improvement of enterprise information transparency can alleviate the negative impact of accounting conservatism on R&D investment.This study is of theoretically and practically significance for comprehensive under-standing of the impact of accounting conservatism on enterprise investment activities and how to reduce the negative effect of accounting conservatism on R&D investment.

Keywords : accounting conservatism ; R&D investment ; ownership ; heterogeneous institutional investors ; information transparency ; state-owned enterprise ; non-state-owned enterprise


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