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| R&D Expensing and Private Placement Pricing |
| XU Hui,ZHOU Xiaohua,ZHOU Bing |
| 1. Chongqing Technology and Business University, Chongqing, China;2. Chongqing University, Chongqing, China |
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Abstract Based on the research and development expenditure accounting policy choice as the entry point, this study systematically investigates the influence of the R&D expensing on the pricing mechanism of private placement of new shares, and the random boundary analysis method is used to conduct empirical analysis on a-share listed companies in Shanghai and Shenzhen that implemented private placement from 2008 to 2018. The results show that: The higher the proportion of the R&D expensing, the greater the degree of undervaluation of issue pricing, and this mechanism is mainly realized through the potential path of negative accrual earnings management activities. The inhibitory effect of the R&D expensing on issue pricing of private placement of new shares is more significant in non-state-owned enterprises; the increase of the proportion of major shareholders’ subscription will strengthen this inhibitory effect.
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Received: 09 February 2020
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