Missing R&D

Ping-Sheng Koh and David Reeb

Journal of Accounting and Economics, 2015, vol. 60, issue 1, 73-94

Abstract: We investigate whether missing R&D expenditures in financial statements indicates a lack of innovation activity. Patent records reveal that 10.5% of missing R&D firms file and receive patents, which is 14 times greater than zero R&D firms. Pseudo-Blank R&D firms (missing R&D firms with patent activity) demonstrate patent filings analogous to the bottom 90–95% of the positive R&D population. Multivariate difference-in-differences tests indicate that Pseudo-Blank R&D firms are more likely to report R&D after an exogenous auditor change. Finally, we provide simple Monte Carlo simulations to evaluate different methods to handle missing R&D in empirical research.

Keywords: M41; O32; D83; Research and Development; R&D reporting; Disclosure; Blank R&D; R&D simulation (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:60:y:2015:i:1:p:73-94

DOI: 10.1016/j.jacceco.2015.03.004

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