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R&D Accounting Treatment, R&D State and Tax Avoidance: With a Focus on Biotech Firms

School of Business, Korea Aerospace University, Goyang 10540, Korea
Sustainability 2019, 11(1), 44; https://doi.org/10.3390/su11010044
Received: 25 November 2018 / Revised: 19 December 2018 / Accepted: 20 December 2018 / Published: 21 December 2018
(This article belongs to the Section Economic and Business Aspects of Sustainability)
This study examines the correlation among R&D accounting treatment, R&D state and tax avoidance behavior, with a focus on biotech firms. Findings from the analysis show that most firms are unlikely to capitalize R&D in a steady state; however, in the case of biotech firms, this is not the case. This may be due to biotech firms’ accounting choice to capitalize R&D outlays based on a strong belief in future opportunities of commercial success. Moreover, the analysis of tax avoidance behavior finds that firms with low capitalization in an R&D steady state have a positive correlation with tax avoidance, whereas biotech firms do not. The results imply that biotech firms focus on sustainable commercial success unlike the general patterns of other industries. View Full-Text
Keywords: R&D accounting treatment; R&D stage; tax avoidance; biotech sustainability R&D accounting treatment; R&D stage; tax avoidance; biotech sustainability
MDPI and ACS Style

Lee, N. R&D Accounting Treatment, R&D State and Tax Avoidance: With a Focus on Biotech Firms. Sustainability 2019, 11, 44. https://doi.org/10.3390/su11010044

AMA Style

Lee N. R&D Accounting Treatment, R&D State and Tax Avoidance: With a Focus on Biotech Firms. Sustainability. 2019; 11(1):44. https://doi.org/10.3390/su11010044

Chicago/Turabian Style

Lee, Namryoung. 2019. "R&D Accounting Treatment, R&D State and Tax Avoidance: With a Focus on Biotech Firms" Sustainability 11, no. 1: 44. https://doi.org/10.3390/su11010044

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