Research On Equity Incentives,conditional Capitalization Of R&D Expenditure And Firm Performance

At present,China advocates the construction of an innovative country,and enterprises as the main body of national innovation are paying more and more attention to R&D activities and gradually increasing R&D investment.On the one hand,domestic enterprises gradually began to widely use equity incentive policies to promote the convergence of corporate management and shareholders' interests.On the other hand,the new accounting standards promulgated by the relevant government departments in 2006 have undergone major changes in order to align with the international accounting standards.The expenditure on research and development(R&D)activities stipulates that it needs to be handled in a conditional capitalization.This kind of processing has great advantages,but we should also see that because the guiding principles of its accounting treatment are only framework,it provides the management with greater decision-making space and flexibility than before.Management's earnings management provides convenience.Management is likely to use this accounting treatment for earnings management in order to obtain the benefits of equity incentives.Through the combing and theoretical research of the existing literature,it is found that the current academic circles mainly focus on R&D investment and enterprise performance,and there are still few studies on conditional capitalization and enterprise performance of R&D expenditure.At the same time,such research lacks a complete chain.This paper analyzes the logic that management can use the conditional capitalization of R&D expenditure under the stimulus of equity incentives to manipulate R&D expenditure capitalization and manipulate capitalization to have different effects on firm performance.The theoretical analysis and empirical test interaction are used to conduct research,and the hypothesis is obtained through theoretical analysis,and then the empirical analysis is used to verify the hypothesis.Through empirical tests,enterprises that implement equity incentives are more inclined to capitalize.Effective capitalization is short-term negative correlation and long-term positive correlation.Firming capitalization is short-term positive correlation and long-term negative correlation.After the separation of effective and ineffective capitalization,it also verified that the implementation of equity incentive policies will encourage management to be more biased towards ineffective capitalization,while equity incentive policies have no significant impact on effective capitalization.On the one hand,this study enriches the research of academic circles,and on the other hand,it may help external stakeholders to identify such earnings management behaviors.