The Research Of R&D Expenditure And Earning Volatility

On the background of economic globalization,there are more and more intense competitions among enterprises,in order to survive from the fierce competition,they need to establish their own competitive advantage.R&D investment is a key factor to enhance the core competitiveness of enterprises.by increasing the intensity of R&D investment,companies can increase their competitiveness,and promote the development of enterprises.Enterprises live for profit,and their earnings quality will be directly related to the value of the enterprise,and also affect the investment of investors.There are a lot of factors that affect corporate earnings volatility,this article attempts to use empirical research method to test weather R&D investment can reduce the volatility of earnings.From the perspective of earnings volatility,using all A-share high-tech enterprises which are listed before December 31,2006 as research sample,the study interval are between 2007 to 2012.By using empirical research method,earnings and earnings volatility as variable,and R&D investment intensity as independent variable,the company size,the company's capital structure,the company's growth as control variables,we construct on the impact of R&D investment to earnings and earning volatility.The study found:(1)the numbers of listed companies which disclose R&D investment information are increasing(2)companies,R&D investment intensity is growing,but the overall level is still inadequate.(3)The high-tech companies' R&D investment are positively correlated to its earnings,with lag of one year.(4)There is a negative correlation between R&D investment and earnings volatility.Increase R&D investment will help reduce the volatility of earnings,thus smoothing earnings.Finally,based on empirical results,this paper put forward relevant proposals from R&D information disclosure norms,strengthen internal R&D investment and improve the external policy environment.