Event study on the Hi-tech listed companies reaction to Pre-tax deduction of enterprise R&D expenses

Author

He, Xuefeng ; Zeng, Bing ; Han, Shuangjiang

Author_Institution

Chongqing Univ. of Technol., Chongqing, China

Volume

1

fYear

2012

fDate

20-21 Oct. 2012

Firstpage

322

Lastpage

324

Abstract

The implementation of the Pre-tax deduction of enterprise research and development expenses on December 10, 2008 was considered a key event in encouraging enterprises to carry out R&D activities and regulating the implementation of the pre-tax. This paper investigates how stock prices respond to the announcements by using event study. Examining 113 cases of Chinese Hi-tech listed companies from November 26, 2008 to December 24, 2008, the study evaluates the stock price impact before and after the policy was announced, then we find that the announcement of R&D had strongly positive impacts on stock prices, and increase shareholders´ wealth and the value of the company around the announcement date.

Keywords

research and development; share prices; taxation; R and D activity; company value; enterprise R and D expense; event study; hi-tech listed company; pretax deduction; pretax implementation regulation; research and development; shareholder wealth; stock price; Companies; Correlation; Economics; Educational institutions; Industries; Investments; Research and development; R&D expenses; event study; reaction;

fLanguage

English

Publisher

ieee

Conference_Titel

Information Management, Innovation Management and Industrial Engineering (ICIII), 2012 International Conference on

Conference_Location

Sanya

Print_ISBN

978-1-4673-1932-4

Type

conf

DOI

10.1109/ICIII.2012.6339666

Filename

6339666