S. Bhagat et I. Welch, CORPORATE RESEARCH-AND-DEVELOPMENT INVESTMENTS - INTERNATIONAL COMPARISONS, Journal of accounting & economics, 19(2-3), 1995, pp. 443-470
This paper explores the determinants of corporate R&D for U.S., Canadi
an, British, European, and Japanese firms. We find last year's debt ra
tio is significantly negatively correlated with current R&D expenditur
es for U.S. firms, and positively for Japanese firms. Second, we docum
ent a significant positive relation between two-year lagged stock retu
rn and current R&D expenditures for U.S., European, Japanese, and larg
e-size British firms. Finally, we find a significant positive relation
between last year's tax payments and current R&D expenditures for Jap
anese firms, and a significant negative relation for medium-size and s
mall-size U.S. firms.