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Accounting Comparability and Corporate Innovative Efficiency

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Accounting Comparability and Corporate Innovative Efficiency. / Chircop, Justin; Collins, Daniel; Hass, Lars Helge; Nguyen, Nhat.

In: The Accounting Review, 01.12.2019.

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Chircop, Justin ; Collins, Daniel ; Hass, Lars Helge ; Nguyen, Nhat. / Accounting Comparability and Corporate Innovative Efficiency. In: The Accounting Review. 2019.

Bibtex

@article{b23829f2cc2e491ab6b7928cf0b602b1,
title = "Accounting Comparability and Corporate Innovative Efficiency",
abstract = "We predict that a firm's greater accounting comparability with its industry peers facilitates its learning from those peer firms' research and development (R&D) investments, allowing that firm to have greater innovative efficiency. We estimate accounting comparability using pro-forma capitalized R&D earnings that link lagged R&D expenditures to future profitability employing the Almon (1965) distributed lag model. We find that greater accounting comparability leads to enhanced ability to predict future cash flows generated by R&D investments of peer firms. In the cross-section, we observe the relation between accounting comparability and innovative efficiency is stronger if peer firms exhibit higher accounting (accrual) quality and are themselves successful innovators. In sum, this study shows that a shared qualitative characteristic of accounting, namely accounting comparability, is positively associated with innovative efficiency.",
author = "Justin Chircop and Daniel Collins and Hass, {Lars Helge} and Nhat Nguyen",
year = "2019",
month = dec
day = "1",
doi = "10.2308/accr-52609",
language = "English",
journal = "The Accounting Review",
issn = "0001-4826",
publisher = "American Accounting Association",

}

RIS

TY - JOUR

T1 - Accounting Comparability and Corporate Innovative Efficiency

AU - Chircop, Justin

AU - Collins, Daniel

AU - Hass, Lars Helge

AU - Nguyen, Nhat

PY - 2019/12/1

Y1 - 2019/12/1

N2 - We predict that a firm's greater accounting comparability with its industry peers facilitates its learning from those peer firms' research and development (R&D) investments, allowing that firm to have greater innovative efficiency. We estimate accounting comparability using pro-forma capitalized R&D earnings that link lagged R&D expenditures to future profitability employing the Almon (1965) distributed lag model. We find that greater accounting comparability leads to enhanced ability to predict future cash flows generated by R&D investments of peer firms. In the cross-section, we observe the relation between accounting comparability and innovative efficiency is stronger if peer firms exhibit higher accounting (accrual) quality and are themselves successful innovators. In sum, this study shows that a shared qualitative characteristic of accounting, namely accounting comparability, is positively associated with innovative efficiency.

AB - We predict that a firm's greater accounting comparability with its industry peers facilitates its learning from those peer firms' research and development (R&D) investments, allowing that firm to have greater innovative efficiency. We estimate accounting comparability using pro-forma capitalized R&D earnings that link lagged R&D expenditures to future profitability employing the Almon (1965) distributed lag model. We find that greater accounting comparability leads to enhanced ability to predict future cash flows generated by R&D investments of peer firms. In the cross-section, we observe the relation between accounting comparability and innovative efficiency is stronger if peer firms exhibit higher accounting (accrual) quality and are themselves successful innovators. In sum, this study shows that a shared qualitative characteristic of accounting, namely accounting comparability, is positively associated with innovative efficiency.

U2 - 10.2308/accr-52609

DO - 10.2308/accr-52609

M3 - Journal article

JO - The Accounting Review

JF - The Accounting Review

SN - 0001-4826

ER -