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|Other Titles:||Does the Stock Market Fully Appreciate the Value of Innovative Activities? Evidence from the Viewpoints of R&D Efficiency and Insider Trading|
Tsao, Shou-Min;Chi, Hsin-Yi;Liu, Cheng-Liang
Innovative activities;R&D efficiency;Insider trading;Market efficiency
|Issue Date:||2016-05-31 16:51:59 (UTC+8)|
This paper intends to explore whether the stock market can appreciate the value of innovative activities. The empirical results show that: (1) the higher R&D efficiency leads to greater future earnings. However, for high (low) R&D efficiency firms, the stock market underestimates (overestimates) the contribution of innovative activities for future earnings. (2) The contribution of innovative activities for future earnings is greater (lower) when accompanied by abnormal insider net buying (insider net selling). Also, for insider net buying (insider net selling) firms, the stock market underestimates (overestimates) the contribution of innovative activities for future earnings. (3) The trading strategy based on R&D efficiency or insider trading generates abnormally positive one-year-ahead returns. One-year-ahead hedge returns to joint trading strategies based on both R&D efficiency and insider trading significantly exceed those based on innovative efficiency or insider trading alone.
International Journal of Accounting Studies
|Appears in Collections:||[會計評論] 期刊論文|
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