Corporate research & development investments: international comparisons

Article Abstract:

A research study explores the determinants of R&D investments made by corporations from the US, Canada, UK, Japan and Europe. The debt ratio for 1994 is shown to have a more negative correlation with R&D expenses made by US firms. The correlation is positive for Japanese companies. Two-year lagged stock returns and 1995 R&D expenditures made by US, European, Japanese and UK companies are found to be positively correlated. The 1994 tax payments are also shown to be positively related with the 1995 R&D expenditures of Japanese companies and negatively related with those of medium and small US companies.

Science and technology policy, Capital market, Capital markets, Corporations

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Motives for forming research and development financing organizations

Article Abstract:

A research study examines the decision to fund R&D activities by forming research and development financing organizations (RDFO). The RDFO, which can be organized as either a limited partnership or a corporation, provides tax and financial reporting advantages but creates moral hazard and adverse selection problems when used as a source of external funding. Results show that debt-related financial reporting benefits affect the decision to organize RDFOs when convertible debt is used as basis for external finance.

Research, Outsourcing

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An empirical analysis of the economic implications of fair value accounting for investment securities

Article Abstract:

The effects of the adoption of of the Statement of Financial Accounting Standards (SFAS) 115, or the fair value accounting for certain securities which requires reporting of unrealized gains and losses be reflected in shareholder's equity, is on equity volatility, which can negatively affect stock prices in banks for the assests-only approach of the SFAS 115. These effects can be mitigated with an matched liability approach of the SFAS 115.

Accounting Methods, Banking industry, Laws, regulations and rules, Accounting and auditing, Accounting, Securities

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