The impact of investor sentiment on corporate research and development : an empirical study.
Pua, John Guo Hao.
Lee, Shu Ren.
Wong, Ming Xu.
Date of Issue2007
College of Business (Nanyang Business School)
This academic study seeks to explore the role of behavioral finance in influencing R&D spending decision in the U.S. We analyze 5,581 firm-years of R&D data for firms listed in the U.S. S&P 500 index for the period 1966-2004. Specifically, we wish to investigate the impact investors' sentiment has on corporate R&D expense. The significant results indicate that managers increase their R&D expenditure in response to a bullish market. Similarly, R&D activity declines when the market is bearish. The contribution of our study therefore highlights the presence of the interaction of investor sentiment and R&D spending activity.
Final Year Project (FYP)
Nanyang Technological University