The Implication of Intellectual Capital for the Future Profitability: Investment, Patent Increment, and Residual Earnings
| Autor: | Hsin-Chi Chen, 陳信吉 |
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| Rok vydání: | 2008 |
| Druh dokumentu: | 學位論文 ; thesis |
| Popis: | 96 This study discusses the relationship between the related information of three stages of developing intellectual capitals, which includes investment, patent increment, and internalized intellectual capitals, and one-year-ahead earnings, and further examines how the stock prices respond to the information. Investment is an important task of developing intellectual capitals, and many researches confirm that R&D investment and advertising investment improve the future profitability. Since patent is one of the intellectual capitals, a new patent just-registered can produce positive cash flow in the future. Since the equity capitals barely produce normal earnings, only developing intellectual capitals can creature residual earnings. Ohlson (1995) evaluated the intellectual capitals by discounting the expectation of future residual earnings. So, we predict that the residual earnings from intellectual capitals will persist to next year. Moreover, the incentive conditions of developing intellectual capitals should include that the persistence of residual earnings is larger than that of normal earnings. Finally, because of the accounting information asymmetry from developing intellectual capitals, we adopt the frame work developed by Mishkin (1983) to test if the earnings expectations embedded in the stock prices fail to reflect fully the contributions of R&D investment, advertising investment, patent increment, and residual earnings to one-year-ahead earnings. This study includes 9,039 firm-year observations, which are sampled from the firms listed in the Taiwan Stock Exchange and OTC stock exchange during 1988 to 2006. The empirical results indicate that R&D investment and residual earnings significantly have positive relations with one-year-ahead earnings. However, advertising investment and patent increment do not significantly have positive relations with one-year-ahead earnings. The results also show that the persistence of residual earnings is significantly larger than that of normal earnings. Larger earnings persistence due to residual earnings makes firms aggressively invest on intellectual capital. The test result of rational expectation shows that the market can not distinguish the contributions of R&D investment, advertising investment, patent increment, and residual earnings to one-year-ahead earnings, and result in mispricing the above information. |
| Databáze: | Networked Digital Library of Theses & Dissertations |
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