The effects of research and development expenditure on long-term stock returns: an analysis of the BRICS nations
| dc.contributor.advisor | Charteris, Ailie | |
| dc.contributor.author | Swan, Matthew | |
| dc.date.accessioned | 2023-04-20T16:05:31Z | |
| dc.date.available | 2023-04-20T16:05:31Z | |
| dc.date.issued | 2022 | |
| dc.date.updated | 2023-04-20T16:05:00Z | |
| dc.description.abstract | Research and development (R&D) facilitate and drive innovation, which plays a critical role in increasing competitiveness for firms and contributing to economic growth. This study examines a sample of 970 firms from Brazil, Russia, India, China and South Africa (BRICS) between 2007-2020 who increased their R&D expenditure or had an unexpected increase in R&D expenditure from one year to the next. The Fama and French (1993) three factor and Carhart (1997) four factor models are used to assess whether these firms earned abnormal returns in the long run. The study finds that value weighted portfolios of firms that increased their R&D expenditure or experienced unexpected R&D expenditure increases exhibited long term positive abnormal returns. This suggests that investors fail to respond immediately to the good news about R&D, consistent with the phenomenon of investor underreaction, and therefore presents an opportunity for market participants to earn abnormal returns by investing in BRICS companies engaged in R&D. | |
| dc.identifier.apacitation | Swan, M. (2022). <i>The effects of research and development expenditure on long-term stock returns: an analysis of the BRICS nations</i>. (). ,Faculty of Commerce ,Department of Finance and Tax. Retrieved from http://hdl.handle.net/11427/37806 | en_ZA |
| dc.identifier.chicagocitation | Swan, Matthew. <i>"The effects of research and development expenditure on long-term stock returns: an analysis of the BRICS nations."</i> ., ,Faculty of Commerce ,Department of Finance and Tax, 2022. http://hdl.handle.net/11427/37806 | en_ZA |
| dc.identifier.citation | Swan, M. 2022. The effects of research and development expenditure on long-term stock returns: an analysis of the BRICS nations. . ,Faculty of Commerce ,Department of Finance and Tax. http://hdl.handle.net/11427/37806 | en_ZA |
| dc.identifier.ris | TY - Master Thesis AU - Swan, Matthew AB - Research and development (R&D) facilitate and drive innovation, which plays a critical role in increasing competitiveness for firms and contributing to economic growth. This study examines a sample of 970 firms from Brazil, Russia, India, China and South Africa (BRICS) between 2007-2020 who increased their R&D expenditure or had an unexpected increase in R&D expenditure from one year to the next. The Fama and French (1993) three factor and Carhart (1997) four factor models are used to assess whether these firms earned abnormal returns in the long run. The study finds that value weighted portfolios of firms that increased their R&D expenditure or experienced unexpected R&D expenditure increases exhibited long term positive abnormal returns. This suggests that investors fail to respond immediately to the good news about R&D, consistent with the phenomenon of investor underreaction, and therefore presents an opportunity for market participants to earn abnormal returns by investing in BRICS companies engaged in R&D. DA - 2022 DB - OpenUCT DP - University of Cape Town KW - finance KW - tax LK - https://open.uct.ac.za PY - 2022 T1 - The effects of research and development expenditure on long-term stock returns: an analysis of the BRICS nations TI - The effects of research and development expenditure on long-term stock returns: an analysis of the BRICS nations UR - http://hdl.handle.net/11427/37806 ER - | en_ZA |
| dc.identifier.uri | http://hdl.handle.net/11427/37806 | |
| dc.identifier.vancouvercitation | Swan M. The effects of research and development expenditure on long-term stock returns: an analysis of the BRICS nations. []. ,Faculty of Commerce ,Department of Finance and Tax, 2022 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/37806 | en_ZA |
| dc.language.rfc3066 | eng | |
| dc.publisher.department | Department of Finance and Tax | |
| dc.publisher.faculty | Faculty of Commerce | |
| dc.subject | finance | |
| dc.subject | tax | |
| dc.title | The effects of research and development expenditure on long-term stock returns: an analysis of the BRICS nations | |
| dc.type | Master Thesis | |
| dc.type.qualificationlevel | Masters | |
| dc.type.qualificationlevel | MCom |