Financial Attributes of Research & Development Expenditures for KOSDAQ Listed Firms with Headquarters in Chungcheong Province in the Korean Capital Market

Purpose – The primary objective of this study is to investigate financial components to determine corporate expenditure for firms with headquarters in Chungcheong province in the domestic capital market. Given the ongoing, active development of this particular region in terms of financial and demographic aspects, it will be important to examine the issue of R&D intensity from the perspectives of foreign and domestic investors. Design/methodology/approach – The sample observations consist of firms in Chungcheong province that are listed on the KOSDAQ stock market after the global financial turmoil began (2010 – 2018). For validity, various econometric estimations are applied to three hypothesis tests. They include static panel data, Tobit regression and a complementary log-log model. Findings – Among total 11 variables, R&D intensity of the prior year and growth opportunities have positive and statistically significant effects on the R&D intensity. Moreover, there may not exist any time-lagged effects between corporate earnings and R&D investments for the former group, while a duration of three year statistically exists for the control group. Research implications or Originality – As an extension of the study of Kim Han-Joon (2018a), this study investigates financial catalysts of R&D intensity for KOSDAQ listed firms in the particular region, which has drawn less attention in the previous literature so far. Results of the study are expected to have mutual benefits for interested parties at the government or corporate level to maximize firm value.