The Stock Market Reaction to the Disclosure of RD Expenditure in Chinese Companies

摘要

In order to strengthen the competitiveness in world market, the Chinese government takes many measures to promote technical research and innovation. One of the most important financial incentives is tax abatement for authenticated high and new technology companies. The purpose of this paper is to investigate how the market responds to the identification of hi-tech company by the government. Our finding is that the market responds positively to the tax abatement but not to the disclosure of intensive R&D expenditure.