Journal article
Accounting Comparability and Corporate Innovative Efficiency
The Accounting review, Vol.95(4), pp.127-151
07/01/2020
DOI: 10.2308/accr-52609
Abstract
We predict that a firm's greater accounting comparability with its industry peers facilitates its learning from those peer firms' research and development (R&D) investments, allowing that firm to have greater innovative efficiency. We estimate accounting comparability using pro forma capitalized R&D earnings that link lagged R&D expenditures to future profitability employing the Almon (1965) distributed lag model. We find that greater accounting comparability leads to enhanced ability to predict future cash flows generated by R&D investments of peer firms. In the cross-section, we observe that the relation between accounting comparability and innovative efficiency is stronger if peer firms exhibit higher accounting (accrual) quality and are themselves successful innovators. In sum, this study shows that a shared qualitative characteristic of accounting, namely, accounting comparability, is positively associated with innovative efficiency.
Details
- Title: Subtitle
- Accounting Comparability and Corporate Innovative Efficiency
- Creators
- Justin Chircop - University of North Carolina at Chapel HillDaniel W. Collins - University of IowaLars Helge Hass - Lancaster University GhanaNhat (Nate) Q. Nguyen - Colorado State University
- Resource Type
- Journal article
- Publication Details
- The Accounting review, Vol.95(4), pp.127-151
- DOI
- 10.2308/accr-52609
- ISSN
- 0001-4826
- eISSN
- 1558-7967
- Publisher
- Amer Accounting Assoc
- Number of pages
- 25
- Language
- English
- Date published
- 07/01/2020
- Academic Unit
- Accounting
- Record Identifier
- 9984962889502771
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