Discretionary R&D Expenditure and Accounting Conservatism

• 발행기관: People & Global Business Association
• 저자명: SeungHwa Jin Sangkwon Cha
• 간행물 정보: 『Global Business and Finance Review』Vol.30 No.10, 41~54쪽, 전체 14쪽
• 주제분류: 경제경영 > 경영학
• 파일형태: PDF
• 발행일자: 2025.10.31

국문 초록

Purpose: This study aims to investigate the relationship between firms' discretionary R&D expenditures and accounting conservatism, with a particular focus on determining whether discretionary spending increases the market's demand for accounting conservatism or directly enhances accounting conservatism itself. Design/methodology/approach: The analysis is conducted using non-financial firms listed on the KOSPI and KOSDAQ markets from 2013 to 2023. Discretionary R&D expenditures are estimated using the model proposed by Qian et al. (2012), while accounting conservatism is measured based on the methodologies outlined by Basu(1997) and Ball and Shivakumar (2005). Findings: First, the discretionary R&D expenditures of firms showed a positive relationship with accounting conservatism. This result suggests that discretionary R&D spending increases information uncertainty, leading to higher demand for accounting conservatism from market participants. Second, the positive relationship between discretionary R&D expenditures and accounting conservatism was more pronounced in the KOSDAQ market. Moreover, the market's demand for accounting conservatism regarding discretionary R&D expenditures was higher in firms with lower foreign investor presence and lower debt ratios. Research limitations/implications: Corporate R&D expenditures may heighten the demand for accounting conservatism, as they are perceived as expenditures that increase short-term uncertainty and information asymmetry. Originality/value: This study is significant in that it examines the market's perception of discretionary R&D expenditures in the Korean capital market through the lens of accounting conservatism.

목차

I. Introduction

II. Prior Studies and Hypothesis

III. Methodology

IV. Result

V. Conclusion

Conflicts of Interest

References

키워드

Accounting Conservatism Timeliness of Earnings Discretionary Research and Development Expenditure Discretionary Expenditure