The effects of R&D expenditure and earnings management on stock options: evidence from market competition
by Yi-Mien Lin; Tzu-Wen Lee
International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE), Vol. 17, No. 1/2, 2021

Abstract: This paper examines the effects of R&D expenditures and earnings management on executive stock options and the effects of the competitiveness of a firm in the industry on R&D and executive stock options under controlling for managerial incentive and corporate governance. The findings are that as R&D of a firm increases, managers are more likely to manipulate earnings to enhance the firm value, thus creating a higher value for stock options. Being more competitive in the industry motivates the firm to broaden business territory, thus it will invest more in R&D to obtain a larger market share. The stronger the competitiveness of a firm and the better the performance are, the more stock options that will be granted to managers.

Online publication date: Tue, 14-Sep-2021

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