caa a22 4500 46318761X CHVBK 20180406164858.0 cr unu---uuuuu 170326e20070401xx s 000 0 eng 10.1007/s11156-006-0013-8 doi (NATIONALLICENCE)springer-10.1007/s11156-006-0013-8 Analysts' forecast revisions and firms' research and development expenses [Elektronische Daten] [Li-Chin Ho, Chao-Shin Liu, Thomas Schaefer] This study examines whether reported values for firms' research and development (R&D) affect analysts' annual earnings forecast revisions following quarterly earnings announcements. Because R&D introduces uncertainty into earnings forecasts, analysts may benefit from additional information searches in an effort to increase forecast accuracy. Also, accounting standards mandate an immediate expensing of R&D, in essence projecting a zero value for the R&D. To the extent that R&D will produce future payoffs, the expense treatment reduces the informativeness of reported earnings for forecasting future earnings. Thus, the marginal benefit of analysts' efforts to produce more information may increase with the magnitude of the R&D component of earnings announcements and trigger additional forecast revisions. Alternatively, if the cost of information searches exceeds the benefit, analysts' forecast revisions may decrease. Our results show a positive relation between R&D expenses and analysts' forecast revision activity. We also find a positive and significant association between the level of R&D expenses and the magnitude of analysts' forecast revisions following quarterly announcements. These results point to a greater amount of analyst scrutiny when reported earnings are accompanied by high levels of R&D expenses. Springer Science+Business Media, LLC, 2006 Analysts' forecast revisions nationallicence Revision activity nationallicence R& D expenses nationallicence Ho Li-Chin Department of Accounting, College of Business Administration, University of Texas, 76019-0468, Arlington, Texas, USA aut Liu Chao-Shin Department of Accountancy, University of Notre Dame, Notre Dame, IN, USA aut Schaefer Thomas Department of Accountancy, University of Notre Dame, Notre Dame, IN, USA aut Review of Quantitative Finance and Accounting Kluwer Academic Publishers-Plenum Publishers; http://www.springer-ny.com 28/3(2007-04-01), 307-326 0924-865X 28:3<307 2007 28 11156 https://doi.org/10.1007/s11156-006-0013-8 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s11156-006-0013-8 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Ho Li-Chin Department of Accounting, College of Business Administration, University of Texas, 76019-0468, Arlington, Texas, USA aut NATIONALLICENCE 700 1- Liu Chao-Shin Department of Accountancy, University of Notre Dame, Notre Dame, IN, USA aut NATIONALLICENCE 700 1- Schaefer Thomas Department of Accountancy, University of Notre Dame, Notre Dame, IN, USA aut NATIONALLICENCE 773 0- Review of Quantitative Finance and Accounting Kluwer Academic Publishers-Plenum Publishers; http://www.springer-ny.com 28/3(2007-04-01), 307-326 0924-865X 28:3<307 2007 28 11156 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer