The relation between RD expenditure and firm’s market value in the car manufacturing industry——Evidence from the U.S. and Japan

摘要

This study mainly examines the relationship between R&D expenditure and market value (measured by market value of equity or MVE) in small car manufacturing companies in the U.S. and Japan during the period 2002–2011. The study applies the empirical research method to collect and analyse secondary data on economic variables which are SALES, NET CASH FLOWS, R&D and MVE. The relationship between R&D expenditure and MVE is statistically examined by means of correlation. The study findings show that R&D expenditure in car manufacturing companies has a significant positive correlation with the firms’ market value. In addition, the disclosure of information about R&D expenditure shows that Japanese companies may value R&D expenditure more than U.S. companies.