{"id":{"repo_id":"city-london","oai_identifier":"oai:openaccess.city.ac.uk:8540"},"canonical_url":"https://search.dev.ndltd.org/etd/city-london/oai:openaccess.city.ac.uk:8540","repository":{"repo_id":"city-london","name":"City University of London","base_url":"https://openaccess.city.ac.uk/cgi/oai2"},"display":{"title":"Accounting valuation issues on R&D","abstract":"In a context of compelling evidence from both the US and UK suggesting that R&D investment is positively related to operating and/or market performance, at a first stance this PhD Thesis examines the relation between R&D investment and persistence in operating and market performance using a large dataset of UK companies during the period 1990-2003. The findings confirm the relation between R&D intensity and consistent growth in sales and gross income but only when taking the industry sector in which a firm operates into account. Moreover, the evidence found indicates a positive relation between R&D intensity and subsequent risk-adjusted excess stock returns among firms that engage in R&D. There is also shown that R&D intensity improves persistence in excess stock returns: the highest R&D intensity firms are found to earn higher risk-adjusted excess returns than the sample median return more consistently, compared to lower R&D intensity firms, as well as firms with no R&D. The weight of the evidence is consistent with some form of mispricing related to the market's slow adjustment to the emerging evidence of significant enhancement in operating performance following recent R&D investment. The Thesis also examines whether R&D plays a role in the relationship between dispersion in analysts' earnings forecasts and returns, given that R&D has been testified empirically in prior literature as an influencing factor for both forecast dispersion and stock returns separately, and forecast dispersion on its own has been identified as a factor with an impact on returns. In addition, in the context of existing evidence on R&D being positively related with greater analyst forecast errors, the Thesis goes one step further and examines the impact of R&D, intensity on forecast revisions. The hypothesis is in favour of a positive association between R&D and the magnitude of revisions, due to the inherent uncertainty of the R&D investment. These topics are examined again for UK listed firms in the period 1990-2003 and there is testified that R&D intensity is a contributing factor for analyst forecast dispersion for the UK, confirming prior findings for the US. There is confirmed a negative relationship between forecast dispersion and returns, which is found to hold even after controlling for the impact of R&D on returns. After decomposing dispersion in analysts' forecasts into analyst forecast uncertainty and a pure differences in opinion part, there is also found that as R&D intensity increases, the ability of R&D to influence returns also increases for high dispersion and high forecast uncertainty firms, but the ability of R&D to influence returns is getting very week for high divergence of opinion firms. This finding implies that in the presence of high R&D intensity, dispersion has an impact on returns mainly through the forecast uncertainty component of forecast dispersion, and not through the divergence of opinion component. Finally, there is generally found a positive relationship between R&D intensity and forecast errors and revisions, which is most times statistically significant though only in the case of revisions, when there exists a reasonable amount of time between the initial and the revised analyst forecast, after controlling for other factors.","abstract_html":"In a context of compelling evidence from both the US and UK suggesting that R&D investment is positively related to operating and/or market performance, at a first stance this PhD Thesis examines the relation between R&D investment and persistence in operating and market performance using a large dataset of UK companies during the period 1990-2003. The findings confirm the relation between R&D intensity and consistent growth in sales and gross income but only when taking the industry sector in which a firm operates into account. Moreover, the evidence found indicates a positive relation between R&D intensity and subsequent risk-adjusted excess stock returns among firms that engage in R&D. There is also shown that R&D intensity improves persistence in excess stock returns: the highest R&D intensity firms are found to earn higher risk-adjusted excess returns than the sample median return more consistently, compared to lower R&D intensity firms, as well as firms with no R&D. The weight of the evidence is consistent with some form of mispricing related to the market's slow adjustment to the emerging evidence of significant enhancement in operating performance following recent R&D investment. The Thesis also examines whether R&D plays a role in the relationship between dispersion in analysts' earnings forecasts and returns, given that R&D has been testified empirically in prior literature as an influencing factor for both forecast dispersion and stock returns separately, and forecast dispersion on its own has been identified as a factor with an impact on returns. In addition, in the context of existing evidence on R&D being positively related with greater analyst forecast errors, the Thesis goes one step further and examines the impact of R&D, intensity on forecast revisions. The hypothesis is in favour of a positive association between R&D and the magnitude of revisions, due to the inherent uncertainty of the R&D investment. These topics are examined again for UK listed firms in the period 1990-2003 and there is testified that R&D intensity is a contributing factor for analyst forecast dispersion for the UK, confirming prior findings for the US. There is confirmed a negative relationship between forecast dispersion and returns, which is found to hold even after controlling for the impact of R&D on returns. After decomposing dispersion in analysts' forecasts into analyst forecast uncertainty and a pure differences in opinion part, there is also found that as R&D intensity increases, the ability of R&D to influence returns also increases for high dispersion and high forecast uncertainty firms, but the ability of R&D to influence returns is getting very week for high divergence of opinion firms. This finding implies that in the presence of high R&D intensity, dispersion has an impact on returns mainly through the forecast uncertainty component of forecast dispersion, and not through the divergence of opinion component. Finally, there is generally found a positive relationship between R&D intensity and forecast errors and revisions, which is most times statistically significant though only in the case of revisions, when there exists a reasonable amount of time between the initial and the revised analyst forecast, after controlling for other factors.","abstract_has_math":false,"creators":["Anagnostopoulou, S.C."],"institution":"City University London","degree_name":"phd","degree_level":"doctoral","degree_discipline":null,"degree_department":null,"school":null,"contributors":[],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2007,"date_issued":"2007-03","date_published":"2007-03","updated_at":"2026-07-24T01:39:14Z","subjects":["HF5601 Accounting"],"languages":[],"rights":[],"rights_urls":[],"identifier_entries":[]},"links":{"outbound_url":null,"outbound_label":null,"outbound_source":null},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:creator","label":"Author","values":["Anagnostopoulou, S.C."]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2007-03"]},{"key":"dc:date.issued","label":"Date","values":["2007-03"]},{"key":"dc:publisher.department","label":"Dc Publisher Department","values":["Bayes Business School","Doctoral Theses","Bayes Business School Doctoral Theses","Cass Business School"]},{"key":"dc:publisher.institution","label":"Dc Publisher Institution","values":["City University London"]},{"key":"dc:relation.isreferencedby","label":"Dc Relation Isreferencedby","values":["https://openaccess.city.ac.uk/id/eprint/8540/"]},{"key":"dc:type","label":"Dc Type","values":["Thesis"]},{"key":"dc:type.qualificationlevel","label":"Dc Type Qualificationlevel","values":["doctoral"]},{"key":"dc:type.qualificationname","label":"Dc Type Qualificationname","values":["phd"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["HF5601 Accounting"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier.uri","label":"Identifier URI","values":["https://openaccess.city.ac.uk/id/eprint/8540/1/Accounting_valuation_issues_on_R%26D_-_vol2.pdf","https://openaccess.city.ac.uk/id/eprint/8540/2/Accounting_valuation_issues_on_R%26D_-_vol2.pdf"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description.abstract","label":"Abstract","values":["In a context of compelling evidence from both the US and UK suggesting that R&D investment is positively related to operating and/or market performance, at a first stance this PhD Thesis examines the relation between R&D investment and persistence in operating and market performance using a large dataset of UK companies during the period 1990-2003. The findings confirm the relation between R&D intensity and consistent growth in sales and gross income but only when taking the industry sector in which a firm operates into account. Moreover, the evidence found indicates a positive relation between R&D intensity and subsequent risk-adjusted excess stock returns among firms that engage in R&D. There is also shown that R&D intensity improves persistence in excess stock returns: the highest R&D intensity firms are found to earn higher risk-adjusted excess returns than the sample median return more consistently, compared to lower R&D intensity firms, as well as firms with no R&D. The weight of the evidence is consistent with some form of mispricing related to the market's slow adjustment to the emerging evidence of significant enhancement in operating performance following recent R&D investment. The Thesis also examines whether R&D plays a role in the relationship between dispersion in analysts' earnings forecasts and returns, given that R&D has been testified empirically in prior literature as an influencing factor for both forecast dispersion and stock returns separately, and forecast dispersion on its own has been identified as a factor with an impact on returns. In addition, in the context of existing evidence on R&D being positively related with greater analyst forecast errors, the Thesis goes one step further and examines the impact of R&D, intensity on forecast revisions. The hypothesis is in favour of a positive association between R&D and the magnitude of revisions, due to the inherent uncertainty of the R&D investment. These topics are examined again for UK listed firms in the period 1990-2003 and there is testified that R&D intensity is a contributing factor for analyst forecast dispersion for the UK, confirming prior findings for the US. There is confirmed a negative relationship between forecast dispersion and returns, which is found to hold even after controlling for the impact of R&D on returns. After decomposing dispersion in analysts' forecasts into analyst forecast uncertainty and a pure differences in opinion part, there is also found that as R&D intensity increases, the ability of R&D to influence returns also increases for high dispersion and high forecast uncertainty firms, but the ability of R&D to influence returns is getting very week for high divergence of opinion firms. This finding implies that in the presence of high R&D intensity, dispersion has an impact on returns mainly through the forecast uncertainty component of forecast dispersion, and not through the divergence of opinion component. Finally, there is generally found a positive relationship between R&D intensity and forecast errors and revisions, which is most times statistically significant though only in the case of revisions, when there exists a reasonable amount of time between the initial and the revised analyst forecast, after controlling for other factors."]},{"key":"dc:format","label":"Dc Format","values":["application/pdf"]},{"key":"dc:title","label":"Title","values":["Accounting valuation issues on R&D"]}]}],"canonical_facts":{"dc:creator":["Anagnostopoulou, S.C."],"dc:date":["2007-03"],"dc:date.issued":["2007-03"],"dc:description.abstract":["In a context of compelling evidence from both the US and UK suggesting that R&D investment is positively related to operating and/or market performance, at a first stance this PhD Thesis examines the relation between R&D investment and persistence in operating and market performance using a large dataset of UK companies during the period 1990-2003. The findings confirm the relation between R&D intensity and consistent growth in sales and gross income but only when taking the industry sector in which a firm operates into account. Moreover, the evidence found indicates a positive relation between R&D intensity and subsequent risk-adjusted excess stock returns among firms that engage in R&D. There is also shown that R&D intensity improves persistence in excess stock returns: the highest R&D intensity firms are found to earn higher risk-adjusted excess returns than the sample median return more consistently, compared to lower R&D intensity firms, as well as firms with no R&D. The weight of the evidence is consistent with some form of mispricing related to the market's slow adjustment to the emerging evidence of significant enhancement in operating performance following recent R&D investment. The Thesis also examines whether R&D plays a role in the relationship between dispersion in analysts' earnings forecasts and returns, given that R&D has been testified empirically in prior literature as an influencing factor for both forecast dispersion and stock returns separately, and forecast dispersion on its own has been identified as a factor with an impact on returns. In addition, in the context of existing evidence on R&D being positively related with greater analyst forecast errors, the Thesis goes one step further and examines the impact of R&D, intensity on forecast revisions. The hypothesis is in favour of a positive association between R&D and the magnitude of revisions, due to the inherent uncertainty of the R&D investment. These topics are examined again for UK listed firms in the period 1990-2003 and there is testified that R&D intensity is a contributing factor for analyst forecast dispersion for the UK, confirming prior findings for the US. There is confirmed a negative relationship between forecast dispersion and returns, which is found to hold even after controlling for the impact of R&D on returns. After decomposing dispersion in analysts' forecasts into analyst forecast uncertainty and a pure differences in opinion part, there is also found that as R&D intensity increases, the ability of R&D to influence returns also increases for high dispersion and high forecast uncertainty firms, but the ability of R&D to influence returns is getting very week for high divergence of opinion firms. This finding implies that in the presence of high R&D intensity, dispersion has an impact on returns mainly through the forecast uncertainty component of forecast dispersion, and not through the divergence of opinion component. Finally, there is generally found a positive relationship between R&D intensity and forecast errors and revisions, which is most times statistically significant though only in the case of revisions, when there exists a reasonable amount of time between the initial and the revised analyst forecast, after controlling for other factors."],"dc:format":["application/pdf"],"dc:identifier.uri":["https://openaccess.city.ac.uk/id/eprint/8540/1/Accounting_valuation_issues_on_R%26D_-_vol2.pdf","https://openaccess.city.ac.uk/id/eprint/8540/2/Accounting_valuation_issues_on_R%26D_-_vol2.pdf"],"dc:publisher.department":["Bayes Business School","Doctoral Theses","Bayes Business School Doctoral Theses","Cass Business School"],"dc:publisher.institution":["City University London"],"dc:relation.isreferencedby":["https://openaccess.city.ac.uk/id/eprint/8540/"],"dc:subject":["HF5601 Accounting"],"dc:title":["Accounting valuation issues on R&D"],"dc:type":["Thesis"],"dc:type.qualificationlevel":["doctoral"],"dc:type.qualificationname":["phd"]},"updated_at":"2026-07-24T01:39:14Z"}