Scale Effects Of R&D As Reflected In Earnings And Returns

With the establishment of the pattern of global economic integration, many Chineseenterprises technology revolution, independent innovation in the lead the development of theenterprise important position, and gradually increase the investment in research. In order toexplore the research and development spending in the influence of enterprise surplus, theinfluence of the volatility of earnings and stock returns to the influence, this text, according tothe national science and technology department instituted in2008high and new technologyindustry standard, shenzhen city in two listed high technology and new technology enterpriseas the research object,2007to2010as a research interval, using returns to scale as aconceptual foundation, we explore how R&D-related earnings performance and earningsvariability depend upon firm size. We find that the positive association between the level offuture earnings and R&D intensity increases with firm size. We also show that R&D scale isassociated with lower market returns, consistent with the idea that R&D investment riskdeclines with scale. The company has increased, R&D investment in the future stock returnson strength and the company is inversely related. R&D investment risk increases with thescale and drop, the bigger the company, the enterprise research and development, the risk thatthe smaller, and then the smaller the future stock returns.This research results, for our country enterprise listed company pays attention to R&Dinvestment, better spending on the investment decision-making, provides an importantreference for the future development of the enterprise strategic decision, especially aboutenterprise R&D investment decisions formulated to provide some theoretical basis and thereference. Thus China to enhance the core competitiveness of the enterprise to ensure thesustainable development.