Research On The Correlation Between R & D Investment And Enterprise Value

As the important factor that affects the innovation of enterprise, R&D gets more and more attention of the managers and scholars. Through the empirical studies, many scholars have examined the relationship between R&D investment and the enterprise value.However, the existing research is often based on the hypothesis of rational economic man and never consider the effect of the manager’s state of mind. In this paper, we brought the manager’s state of mind into the scope of research, and we studied the relationship between R&D and the enterprise value when the managers are overconfident through the case analysis and empirical studies.At the first of all, we selected the case of Yiding during the part of the case analysis.Yiding was a private internet company with good development prospect, but due to the overconfidence of the chairman Jianrong Wu, it put too much money into R&D blindly and finally made itself bankrupt.Next, during the part of empirical studies, we selected a sample of listed companies from 2008 to 2014 and built two multiple linear regression models to research the relationship between managers overconfidence, R&D intensity and the enterprise value.And the research found that: managers overconfidence and R&D is significantly positive correlation. What’s more, R&D and the enterprise value is significantly negative correlation when managers are overconfident.At last, we made a summary of the research conclusions, and gave some improvement suggestions.