Alam, Pervaiz; Liu, Min; Peng, Xiaofeng - In: Review of Quantitative Finance and Accounting 43 (2014) 3, pp. 441-462
This study investigates the relationship between research and development (R&D) expenditures and risk premiums implied in the costs of equity capital. We posit that R&D expenditures represent an information risk factor resulting from both information asymmetry about R&D between investors and...