Research has established that Ramp;D-intensive firms are characterized by substantial future risk-adjusted stock returns. The reasons for this phenomenon and its policy implications, however, are widely debated. Some attribute the excess returns to investors' systematic undervaluation of Ramp;D...

We investigate the impact of the magnitude of current sales changes on asymmetric cost behavior. We expect that managers are likely to consider small (large) current sales decreases as temporary (permanent). Therefore, they will be less (more) likely to cut costs for small (large) current sales...

We investigate the relationship between cost stickiness and management earnings forecasts. Prior research suggests that earnings are more volatile for sticky cost firms resulting in greater earnings forecast errors. The greater forecast errors might increase investors' demand for information and...

We examine future excess returns, earnings variability and stock volatility of Ramp;D Leaders and Followers. Drawing on the business strategy literature, which makes a clear distinction between Ramp;D Leaders and Followers, we show that Ramp;D Leaders do earn significant future excess returns,...

The structural shift in the US from a tangible- to an intangible-intensive economy raises a concern that GAAP-based reporting might have lost its usefulness to investors. Amir and Lev (1996) argue that accounting information is not useful for intangible-intensive firms. In contrast, Collins et...

We study how to improve the value-relevance of financial information for intangible-intensive firms by investigating two alternatives: capitalizing R&D expenses and disclosing intangible information. Using patent counts/citations to proxy for intangible intensity, we find that the incremental...

Recent research documents the empirical phenomenon of ldquo;sticky costsrdquo; and attributes it to a theory of deliberate managerial decisions in the presence of adjustment costs. We refine this theoretical explanation and show that it gives rise to a more complex pattern of asymmetric cost...

Recent work in management accounting offers several novel insights into firms' cost behavior. This study explores whether financial analysts appropriately incorporate information on two types of cost behavior in predicting earnings - cost variability and cost stickiness. Since analysts'...