The Impact Of R&D Investment On Stock Expected Returns Under Economic Cycle Constraints

R&D activities are one of the most effective ways for companies to innovate and improve their productivity,but the uncertainty of R & D activities can also lead to a variety of risks,which in turn affect capital market investors' judgment on the company's future performance and risk,and then affect the stock expected returns.R&D activities in different ways or different levels have different influent ways to corporate risk and future benefits,at the same time the economic cycle also affect the R&D investment decision-making,research and development costs,output and other aspects of production,so in different economic cycles,the different indicators of R&D investment have different effects on stock expected return.This paper not only studies the impact of different R & D investment on the expected return on stock,but also introduces the economic cycle constraint to analyze the influence of different economic cycles on the relationship between R & D investment and stock expected return.Based on the literature on R&D investment,economic cycle and stock return,this paper takes the listed companies in Shanghai and Shenzhen as the research samples from 1995 to 2014,and using the fixed effect model,this paper analyzes the influence of different R&D investment on stock expected return,and then taking into account the economic cycle will affect the R&D investment decision-making,R&D costs,output production and so on,the economic cycle may be one of the key factors influencing the relationship between R&D investment and expected return of the stock.Therefore,further analyzes the influence of different R&D investment on stock expected return under the economic cycle constraint.The empirical results show that different R&D investments have different effects on stock expected return.R&D input has a significant positive impact on stock expected return,R&D output patent and R&D efficiency have a negative impact on stock expected return,and the impact of different patents on stock returns have also undergone great changes.Then when considering the economic cycle,the impact of R&D investments on stock returns is changing,in the economic up and down the period,R&D investment have a significant positive impact on the stock expected return,and in the economic downturn is less than the impact of economic up;R&D output in the economic up is still a negative impact during the economic downturn for the positive impact.These two differences changes come from that when the economic environment is not good,the enterprise's adjusting the cost of the impact changes risk.R&D efficiency maintains a negative impact on the stock expected return,especially in the economic up,and these indicating R&D efficiency of enterprise shows resource utilization capabilities,and can reduce business risk and reduce the stock expected return.Through this empirical study,not only can enrich the research and development of academic research,but also help investors to analyze business R & D activities.