Abstract
The purpose of this study is to verify the existence of a causal relationship between R&D expenses not activated by Accounting, a proxy for innovation, and the book-to-market ratio (BTM), which demonstrates expectation of value generation in firms. We analyzed a sample composed of 30 Brazilian public firms that disclosed information about R&am
Highlights
In the current context of knowledge generation, firms are combining tangible and intangible assets to seek new ways of economic value generation. Lev (2001) defines intangible resources as rights to economic benefits that do not have a physical body
We applied the Granger Causality Test and the results demonstrated that R&D expenses generate a negative effect on book-to-market ratio (BTM) ratio in a 3-lag cycle, which is an increase in the market value above its book value in an average of 3 years
Our paper explores the existence of a causal relationship between R&D expenses discharged in the Profit and Loss (P&L), that are not capitalized by Accounting, and the distance between the book and market values, measured by the BTM ratio, in the Brazilian public firms
Summary
In the current context of knowledge generation, firms are combining tangible and intangible assets to seek new ways of economic value generation. Lev (2001) defines intangible resources as rights to economic benefits that do not have a physical body. Lev (2001) defines intangible resources as rights to economic benefits that do not have a physical body. In the current context of knowledge generation, firms are combining tangible and intangible assets to seek new ways of economic value generation. They are constituted by a structured set of knowledge, practices and attitudes aimed at a firm's innovation (Lev, 2001). Through the interaction with tangible assets, intangible resources corroborate with the generation of corporate value and economic growth (Lev, 2001)
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