Financing Methods?Capitalized R&D Choice And Firm Value

Both investment activities and financing activities are important financial behaviors in the development process of the firm,and good financing structure can provide better support for investment activities.Correct investment decisions can improve the financing environment for enterprises,and proper R&D accounting treatment and disclosure will have a beneficial effect on the investment and financing policies of enterprises.Therefore,regulating the accounting treatment of R&D expenditures and arranging for investment and financing behavior can create value for the enterprise,so that it can improve the company's core competitiveness.This article takes a sample of companies in Shanghai and Shenzhen A-shares from 2009 to2016 which disclosed R&D expenditures and capitalized R&D choice information.It based on the full research of existed literates and related capitalized R&D choice theory,firm value relevance theory and financing method theories.The author proposes research hypotheses,selects relevant variables and constructs a regulatory effect test model and uses multivariate linear regression analysis.With the help of SPSS19.0,the author conducts some empirical tests by using sample data collected from listed companies.The existing literature mainly focuses on R&D investment and seldom studies accounting treatment of R&D investment and capitalized R&D choice.This article uses the financing method as an intermediate variable to study its relationship with capitalization R&D choice and firm value.The literature on the relationship between the three is even rarer.Therefore,this paper first studies the relationship between capitalization R&D choice and return on total assets.On the basis of significant effect and then studies the effect of financing methods on the relationship between R&D capitalization and firm value from the perspective of adjustment effect.The results show that:(1)Overall,capitalized R&D choice is conducive to the promotion of firm value.Different financial methods will further affect the value effect of capitalized R&D choice.(2)In particular,the more endogenous financing,the stronger the value effect of capitalized R&D choice;The more stock financing,the weaker the value effect of capitalized R&D choice;Besides,The higher the debt ratio,short-term liabilities and the bank borrowings,the stronger the value effect of capitalized R&D choice.And the role of commercial credit is not obvious.Finally,on the basis of empirical analysis,the following recommendations are made:(1)Relevant accounting standards should standardize the accounting methods and disclosures of R&D investment,so that it can provide more effective guidance for the firms;(2)Improving the financing structure.According to the conclusions of this paper.we should appropriately expand endogenous financing and rationally match the proportion of external financing in order to increase the value of enterprises.(3)We should promote the organic combination of financing methods and R&D innovation to create a good investment and financing environment for enterprises.In addition,this paper puts forward the shortcomings of this study and future research directions.