Impact of CEO pensions on value relevance of R&D expenditures
Impact of CEO pensions on value relevance of R&D expenditures
Author(s): Kyung Jin Park, Kyoungwon MoSubject(s): Economy, Business Economy / Management
Published by: ТОВ “Консалтингово-видавнича компанія “Ділові перспективи”
Keywords: CEO pension; firm value; inside debt; R&D expenditures; value relevance;
Summary/Abstract: Since CEO pension is unsecured and unfunded liabilities of the firm, it induces CEOs to have long-term incentives towards minimizing their firms’ default risk. Motivated by the unique characteristics of CEO pension, this study investigates the impact of CEO pension on the value relevance of R&D expenditures. Using Tobin’s Q ratio to measure firm value, the empirical results show that CEO pension intensifies the relation between R&D expenditures and Tobin’s Q ratio. The results remain robust in two-stage least square and propensity score matching regression analysis to address the endogeneity issues in the relation between CEO pension and the value relevance of R&D expenditures. In addition, the regression results with ROA and F-score as the alternative dependent variables also confirm that CEO pension intensifies the relation between R&D expenditures and firm value.
Journal: Problems and Perspectives in Management
- Issue Year: 16/2018
- Issue No: 4
- Page Range: 224-234
- Page Count: 11
- Language: English
