Goodwill impairment and corporate innovation investment

Ying Zhang and Qianwen Zhang

International Review of Financial Analysis, 2025, vol. 97, issue C

Abstract: This study examined A-share listed companies from China's Shanghai and Shenzhen stock exchanges to investigate the relationship between goodwill impairment and corporate innovation investment spanning 2012 to 2022. The findings indicate that goodwill impairment positively influenced corporate innovation investment, continuing for up to two years postimpairment. A possible reason for goodwill impairment to facilitate corporate innovation investment is how companies engage in earnings management to establish room for successive innovation endeavors. Additionally, private companies respond more quickly to merger and acquisition failures regarding innovation investment, outpacing state-owned enterprises by one period. This expanded reaction may be ascribed to private companies' heightened external competitive pressure.

Keywords: Goodwill impairment; Earnings management; Enterprise innovation investment (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:97:y:2025:i:c:s105752192400810x

DOI: 10.1016/j.irfa.2024.103878

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