||The Effects of Institutional Factors and Corporate Governance on the Value Relevance of Capitalized R&D: A Cross-Country Analysis
||Department of Accountancy
Country-level institutional factors
Firm-level corporate governance
鑑於目前世界各國紛紛朝公平價值會計邁進，並積極與國際會計準則接軌。本研究以「IAS 38無形資產」公報為根基，並著眼於其中所規範允許公司管理當局可資本化「發展成本」(development costs)為主要研究議題，探討國家層級制度因素 (country-level institutional factors)與公司層級之公司治理機制 (firm-level corporate governance)對研發資本化之價值攸關性的影響。此外，本研究亦進一步分析這兩個不同層級的治理機制間所存在的互動關係。本研究自Institutional Shareholder Services (ISS)所發行的Corporate Governance Quotient資料庫取得2005至2008年之跨國性公司別治理分數(CG score)，並分別自Worldscope及Datastream等資料庫取得相關的財務資料及市場股價資訊。實證結果顯示，國家層級之制度因素及公司層級之治理機制對研發資本化之價值攸關性均具顯著為正的影響效果。同時，本研究更進一步發現，當國家具有較為嚴謹的制度因素時（即公司有誘因提高其財報資訊的透明度或有較強的法律執行力），公司層級治理機制對研發資本化之價值攸關性的正向影響效果將更為顯著，據此推論此兩者是為互補關係 (complements)。整體而言，在各國之會計實務欲朝向國際會計準則整合為一時，國家之制度環境實扮演了一個相當重要的角色。
This study investigates the effects of country-level institutional factors and firm-level corporate governance on the value relevance of capitalized R&D around the world. Moreover, I provide evidence regarding the interactive effects of the aforementioned two mechanisms. I obtain the firm-specific governance index (CG score) from Corporate Governance Quotient database issued by Institutional Shareholder Services (ISS). Financial data are retrieved from the Worldscope Database, and market price and dividends payout data are from the Datastream Database. Using 3,586 firm-year observations from 24 countries in the period of 2005-2008, I find that both country-level institutional factors and firm-level corporate governance have significantly positive effects on the value relevance of capitalized R&D. In addition, the positive effect of firm-level corporate governance on the value relevance of capitalized R&D is more pronounced in countries where firms have stricter institutional factors (i.e., firms have incentives to be transparent or their legal enforcement is strong). Thus, firm-level corporate governance and country-level institutional factors seem to be complements for each other in enhancing the value relevance of capitalized R&D. Taken together, the analyses show that the valuation usefulness of capitalized intangible assets is heterogeneous across countries in a way that is consistent with the reporting incentives view in the international accounting literature.
TABLE OF CONTENTS iv
LIST OF TABLES v
1. Introduction 1
2. Literature Review and Hypothesis Development 6
2.1. The Trade-off between Relevance and Reliability of R&D Capitalization 6
2.2. Evidence on the Value Relevance of Capitalized R&D: Opportunism vs. Signaling 8
2.3. The Reporting Incentives Perspective 11
2.4. Country-level Legal Protection and the Value Relevance of Capitalized R&D 12
2.5. Firm-level Corporate Governance and the Value Relevance of Capitalized R&D 13
2.6. Country-level Institutional Factors, Firm-level Corporate Governance, and the Value Relevance of Capitalized R&D 15
3. Data and Methodology 18
3.1. Data 18
3.2. Sample Selection 20
3.3. Methodology 27
4. Empirical Analysis 38
4.1. Descriptive Statistics 38
4.2. Regression Results 43
5. Extensions and Robustness Checks 54
5.1. Alternative Measures of the Value Relevance 54
5.2. Another Measure of Country-level Institutional Factors 62
5.3. Value Relevance of Accounting Information: Comparison between IFRS and SFAS for R&D Accounting Treatment 64
6. Summary and Concluding Remarks 67
Appendix A. Accounting Treatments and the Adoption Year of R&D Capitalization 81
Appendix B. Institutional Shareholder Service (ISS) Corporate Governance 86
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