Abstract
The study examines the existence of the optimal level of corporate R&D expenditure, which may be in active debate among the interested parties including government regulators and corporate managers in the Korean capital market. Given that most large domestic corporations have tended to gradually increase R&D investments in recent years, the study tested separate hypotheses in relation to the optimal level of the corporate R&D outlay and financial determinants for firms listed on the KOSPI stock exchange in the post-global financial turmoil period. Concerning the results, the sample firms overall seem not to maintain an optimal level of R&D expense at the intra-industry level, even if statistically significant differences were detected at the inter-industry level. Moreover, three explanatory variables such as R&D expenses of the prior fiscal year, profitability and Tobin’s Q showed statistically pronounced effects to account for the level of R&D spending. Further research may be warranted to apply the consequences of the study to the R&D activities of firms that belong to other financial markets, such as those advanced or emerging.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call