Journal of Accounting and Economics Vol. 60 No. 1 2015
Missing R&D
Abstract
We investigate whether missing R&D expenditures in financial statements indicates a lack of innovation activity. Patent records reveal that 10.5% of missing R&D firms file and receive patents, which is 14 times greater than zero R&D firms. Pseudo-Blank R&D firms (missing R&D firms with patent activity) demonstrate patent filings analogous to the bottom 90–95% of the positive R&D population. Multivariate difference-in-differences tests indicate that Pseudo-Blank R&D firms are more likely to report R&D after an exogenous auditor change. Finally, we provide simple Monte Carlo simulations to evaluate different methods to handle missing R&D in empirical research.
- DOI
- 10.1016/j.jacceco.2015.03.004
- Volume
- 60
- Issue
- 1
- Pages
- 73-94
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib