An Analysis Of The Effects Of R&D Investment On Performance Of Listed Companies In China

With advancement of science and technology, R&D is more and more important to the listed company’s survival and development. The technology innovation result from research and development should improve the company’s market competitiveness and comprehensive developing ability. So, as the main body of R&D, the company should know the true mean of R&D and then be engaged in an reasonable R&D activities. At the same time, the company should know how to have a reasonable allocation of resources between the research stage and development stage. The above problems have become the focus of enterprise managers. Under the condition of distinguishing the research stage and development stage, this paper analyzes the R&D activities impact on corporate performance.Through the literature review about the concept of R&D and the relationship between R&D and corporate performance, we find that studies about the relationship between R&D and corporate performance just come from the aspect of the total spending without distinguish the research stage and development stage. However, the different characteristics between different stages decide the degree of a company’s profitability and development potential. Meanwhile, the new accounting standards require companies to distinguish the research stage and the development stage. What impact is produced from different stage? What result is came from after the new accounting standards published? These problems need to reply quickly. We selected the financial statements data between2007and2010of listed companies in China and used main business profit rate, Tobin’s Q to measure enterprise value to research the relationship between the R&D activities and on corporate performance.By empirical study, we found that the research stage investment has an influence to the company performance, and has a significant influence to the growth of company. The development stage investment could also improve the enterprise performance, but just a limited role. Whether the research stage investment or the development stage investment, their impact on enterprise performance exist a hysteresis, and the hysteresis of research stage investment is better than the development stage investment’s. According to the conclusion, this paper put forward the following suggestions:to improve the R&D’s attention and increase it’s investment; to adjust the structure of R&D; to improve the role of the enterprise and pay more attention to the new technology innovation; to strengthen the information disclosure, then standard the form and content of R&D.