R&D intensity and the performance of IPOs

Roger C.Y. Chen, Chao-Shi Wang and Ru-Ping Shi

International Journal of Innovation and Learning, 2008, vol. 5, issue 3, 241-254

Abstract: The importance of innovation resides in the nexus of competitive ability. This article investigates the relationship between Research and Development (R&D) intensity and the performance of Initial Public Offerings (IPOs) in Taiwan. Our empirical results show that most companies have lowered R&D intensity before IPO, whereas they slightly increase R&D intensity after issuance. That implies that earnings manipulation before going public may exist. An additional finding is that, those companies which have gradually increased their R&D intensity prior to IPO perform not only better than the market portfolio in the long run, but also superior to those which spent less in R&D before IPO.

Keywords: performance; research and development; R&D intensity; innovation; initial public offerings; IPOs; Taiwan. (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijilea:v:5:y:2008:i:3:p:241-254

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