E3S Web of Conferences (Jan 2021)

Research and Development Investment and Earnings Quality Based on Regression Analysis

  • Cheng Hongwei,
  • Peng Xi

DOI
https://doi.org/10.1051/e3sconf/202125303003
Journal volume & issue
Vol. 253
p. 03003

Abstract

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Based on the big data of Chinese listed manufacturing firms, we examine the relationship between research and development (R&D) investment and earnings quality. We construct a regression model and find that corporate R&D investment has a positive effect on earnings quality. R&D investment is useful to repress earnings management motives and thus improve earnings quality in listed manufacturing firms in China. And this positive correlation is more significant in state-owned firms than that in non-state-owned firms.