R&D value of Chinese manufacturing listed companies

An Tongliang and Wang Wenyi

China Political Economy, 2018, vol. 1, issue 2, 241-262

Abstract: Purpose - The way to measure the value of an enterprise’s R&D investments remains elusive for theoretical and empirical study on innovation economics. The paper aims to discuss this issue. Design/methodology/approach - This paper expands the asset-value model pioneered by Griliches (1981) and applies it for the first time to the Chinese stock market to calculate the value of R&D investment instilled by Chinese manufacturing listed companies (CMLCs) from 2003 to 2014. Findings - The authors find that: the assets-value model can better explain the enterprise value composition of CMLCs; with equal input, the value of R&D is higher than that of tangible assets, and lower than that of organizational assets; compared with the developed countries, the R&D value of CMLCs is lower; and the R&D value of CMLCs saw a downward trend from 2007 to 2014. Originality/value - Furthermore, by rationally estimating the value of organizational assets and non-tradable shares, and innovatively introducing semi-annual momentum indicators from the perspective of behavioral finance to control the influence of investor sentiment on enterprise value, this paper tries to develop the asset-value model and provides a feasible solution to the problem of measuring the value of Chinese enterprises’ R&D investment.

Keywords: Innovation; Investor sentiment; Market valuation; Asset-value model (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eme:cpepps:cpe-10-2018-012

DOI: 10.1108/CPE-10-2018-012

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