This thesis consists of three empirical essays studying the capital market implications of the accounting for R&D costs. The first empirical study (Chapter 2) re-visits the debate over the positive R&D-returns relation. The second empirical study (Chapter 3) examines the risk relevance of current R&D accounting. The third empirical study (Chapter 4) explores the joint impact of R&D intensity and competition on the relative relevance of the idiosyncratic part of earnings. Prior research argues that the positive relation between current R&D activity and future returns is evidence of mispricing, a compensation for risk inherent in R&D or a transformation of the value/growth anomaly. The first empirical study contributes to this debate by taking into account the link between R&D activity, equity duration and systematic risk. This link motivates us to employ Campbell and Vuolteenaho (2004)'s intertemporal asset pricing model (ICAPM) which accommodates stochastic discount rates and investors' intertemporal preferences. The results support a risk based explanation; R&D intensive firms are exposed to higher discount rate risk. Hedge portfolio strategies show that the mispricing explanations is not economically significant. The second empirical study contributes to prior research on the value relevance of financial reporting information on R&D, by proposing an alternative approach which relies on a return variance decomposition model. We find that R&D intensity has a significant influence on market participants' revisions of expectations regarding future discount rates (or, discount rate news) and future cash flows (or, cash flow news), thereby driving returns variance. We extend this investigation to assess the risk relevance of this information by means of its influence on the sensitivity of cash flow and discount rate news to the market news. Our findings suggest R&D intensity is associated with significant variation in the sensitivity of cash flow news to the market news which implies that financial reporting information on R&D is risk relevant. Interestingly, we do not establish a similar pattern with respect to the sensitivity of discount news to the market news which may dismiss the impact of sentiment in stock returns of R&D intensive firms. The third empirical study examines the effect of financial reporting information on R&D to the value relevance of common and idiosyncratic earnings. More specifically, we investigate the value relevance of common and idiosyncratic earnings through an extension of the Vuolteenaho (2002) model which decomposes return variance into its discount rate, idiosyncratic and common cash flow news. We demonstrate that the relative importance of idiosyncratic over common cash flow news in explaining return variance increases with firm-level R&D intensity. Extending this analysis, we find that this relation varies with the level of R&D investment concentration in the industry. Those results indicate that the market perceives that more pronounced R&D activity leads to outcomes that enable the firm to differentiate itself from its rivals. However, our results also suggest that the market perceives that this relation depends upon the underlying economics of the industry where the firm operates.

Abstract For a small and medium size firm (SME), expansion into new foreign markets is a remarkable milestone, requiring specific resources and capabilities. The purpose of this study is to explore how management in internationalizing small and medium-size firms allocate their limited resources between key functions, in particular, between marketing and R&D. This thesis builds on a resource-based view of the firm, a dynamic capabilities perspective, and the SME internationalization literature, and therefore assumes that a firm’s success in foreign markets is closely related to its internal resource and capability configurations. The findings of this study suggest that SMEs need a capability portfolio in which the relative importance of key capabilities varies as international expansion proceeds. It appears that throughout the international expansion process, investments in developing R&D capabilities do not notably decrease, not even at the time when SMEs need to begin to develop other activities, such as marketing. Closer examination reveals that investments in the capabilities’ underlying microfoundations, rather than the resource allocation between the key functions per se, determine the nature of the resulting competitive advantage. Cross-border mergers are specific situations that reveal the strong influence of function-specific microfoundations on functional capabilities and thus, on an SME’s dynamic capabilities. The results of this study show that in merger deals, each firm comes with distinctive cross-functional structures, processes, routines, and skills. Synergies might not be capitalized if management is not able to effectively align merging firms’ underlying microfoundations. The results in this thesis underline the invaluable role of SMEs’ management. The findings show that even if the different phases of international expansion require diverse managerial capabilities, unanimity among the top management team executives is needed (surprisingly) only when these SMEs are making substantial resource commitments. Such adoption to changing conditions is an illustration of dynamic managerial capabilities that partly determines success in international markets. / Tiivistelmä Pienelle yritykselle kansainvälistyminen on merkittävä virstanpylväs, joka edellyttää erityisiä resursseja ja kyvykkyyksiä. Tässä työssä on tarkoitus tutkia, kuinka pienen kansainvälistyvän yrityksen johto kohdentaa yrityksen rajallisia resursseja tuotekehitys- ja markkinointifunktioihin. Väitöskirjassa oletetaan, että pienten ja keskisuurten yritysten menestyminen kansainvälisillä markkinoilla liittyy olennaisesti yritysten käytössä oleviin resursseihin ja kyvykkyyksiin, ja tästä johtuen väitöskirjan teoreettinen osa rakennetaan resurssiteorian, dynaamisten kyvykkyyksien teorian sekä pienten yritysten kansainvälistymistä koskevien tutkimuksien yhdistelmänä. Työn tulokset osoittavat, että pienet yritykset tarvitsevat erityisen kyvykkyysportfolion, jossa eri kyvykkyyksien suhteellinen osuus muuttuu yrityksen kansainvälistymisen edetessä. Näyttäisi siltä, että yritysten investoinnit tuotekehitykseen eivät juuri pienene silloinkaan, kun yritykset aloittavat markkinointiin panostamisen. Lähempi tarkastelu kuitenkin osoittaa, että investoinnit eri funktioihin eivät sinänsä määrää syntyvää kilpailuetua, vaan edun luonne määräytyy sen mukaan, kuinka resurssit kohdennetaan taustalla oleviin kyvykkyyksien (mikro)rakenteisiin. Kansainväliset yrityskaupat ovat erityisiä tapahtumia jotka paljastavat funktiokohtaisten mikrorakenteiden merkittävän vaikutuksen. Työn tulokset osoittavat, että kussakin yksittäisessä fuusioituvassa yrityksessä on omanlaisensa, ajan myötä funktioiden välille muotoutuneet rakenteet, prosessit ja käytänteet. Yrityskauppojen hyödyt voivat jäädä saavuttamatta ellei näitä fuusioituvien yritysten funktioiden välisiä mikrorakenteita saada sujuvasti sulautettua yhteen. Tutkimustulokset korostavat pienen yrityksen johdon merkitystä. Kasvu kansainvälisillä markkinoilla vaatii johdolta erityistä kyvykkyyttä, mutta hieman yllättäen tulokset osoittavat, että johtoryhmän jäsenten yksimielisyys on tärkeää vain niissä kasvun vaiheissa, jotka edellyttävät erityisen merkittäviä sitoumuksia. Tällainen muuttuviin olosuhteisiin sopeutuminen on hyvä osoitus johdon dynaamisista kyvykkyyksistä, jotka osaltaan määräävät yrityksen menestymisen kansainvälisillä markkinoilla.

Som en konsekvens av alltmer investeringar inom forskning och utveckling (FoU), och dess betydelse för ekonomisk tillväxt, företagsresultat och välfärd, har denna immateriella tillgång fått ett ökat intresse bland forskare. Samtidigt pågår spekulationer om huruvida informationen om FoU, inte minst i läkemedelsföretag, påverkar kostnaden på eget kapital och hur olikakapitalkostnader påverkas av obligatoriska rapporteringskrav. Trots det har regleringen av FoU-rapportering fått lite uppmärksamhet. Exempelvis leder EU-direktiv till att FoUrapporteringen kan ses som frivillig istället för obligatorisk.Det huvudsakliga syftet med studien var att beskriva och analysera hur större omfattning av FoU-rapportering påverkar läkemedelsföretags kostnader på eget kapital och hur reglerad FoU-rapportering inverkar på läkemedelsföretags omfattning av sådan rapportering och deras kostnader på eget kapital. Urvalsramen bestod av läkemedelsföretag från Sverige, Belgien,Storbritannien, Tyskland, Frankrike, Norge, Schweiz och Danmark. Av 31 läkemedelsföretag uppfyllde 29 kraven för att ingå i studien. Multipla regressionsanalyser visar att reglerad FoUrapportering leder till att läkemedelsföretagens omfattning av FoU-rapportering generellt ökar,men utan att det påverkar deras kostnader på eget kapital. Vidare visar analyserna att större omfattning av FoU-rapportering inte har någon inverkan på läkemedelsföretags kostnader på eget kapital, men att läkemedelsföretagens omfattning av FoU-rapportering påverkas av storleken på läkemedelsföretag i länder som har oreglerad FoU-rapportering. / As a consequence of growing investments in research and development (R&amp;D), and its importance for economic growth, corporate earnings and welfare, the interest among researchers for this intangible asset has increased. At the same time, speculations regarding if the information about R&amp;D activities, not least in pharmaceutical companies, affects the cost of equity, and how different capital costs are affected by mandatory disclosure requirements. However, the regulation of R&amp;D-disclosure has received little attention. For example, the result of some EU directives is that R &amp; D-disclosure can be seen as voluntary rather than mandatory.The main purpose of the study was to describe and analyse how a more extensive R&amp;Ddisclosure affects pharmaceutical companies' cost of equity and how regulated R&amp;Ddisclosure affects the pharmaceutical companies extent of such disclosure and their cost of equity. The selection group consisted of pharmaceutical companies from Sweden, Belgium, Great Britain, Germany, France, Norway, Switzerland and Denmark. Out of 31 pharmaceuticalcompanies, 29 met the requirements to be included in the study. Multiple regression analyses show that regulating R&amp;D-disclosure leads to a general increase in the extent of R&amp;Ddisclosure by pharmaceutical companies, but without affecting their costs of equity. Furthermore, the analyses show that a greater extent of R&amp;D-disclosure has no impact on the pharmaceutical companies' cost of equity, but that the extent of R&amp;D-disclosure bypharmaceutical companies is affected by the size of pharmaceutical companies in countries that have unregulated R&amp;D-disclosure. / <p>Betyg D, 170915</p>

Šulcová, Darina. Knowledge Economy as the Factor of Firm Economic Performance. Diploma thesis. Brno: Mendel University in Brno, 2018. The main aim of this diploma thesis is to find out if there is any relation between the Knowledge Economy and Economic Performance. Member states of the European Union are compared within each other in accessing the Knowledge Economy not only according to composite indicators, but also according to sub-indicators of the Knowledge Economy. This thesis focuses on the situation of the Czech Republic and how it accesses sub-indicators of the Knowledge Economy. Member states are then compared also according to their national, high-tech industry and firm Economic Performance. The analysis of the relation between the composite indicators or sub-indicators of the Knowledge Economy and national, high-tech industry or firm economic performance is the key part of this thesis. In the end, there is a summary of main findings and some recommendations are made for the Czech Republic to improve its Knowledge Economy situation.

Information Technology (IT) has become a vital tool for most industrial businesses and Scania CV AB is no exception. As the importance of IT generally has increased, the usage and number of applications has grown as well. Applications are substantial assets for an organization that is heavily supported by IT. Consequently, a way of managing applications efficiently and sustaining the costs of applications rather low – doing more with less – is required. In addition it is also important, from a business perspective, that applications as part of IT are aligned with business strategies and goals. Application Portfolio Management (APM) is a practice and a business-centric activity aimed to allocate IT resources to support business objectives and strategies; it helps determining the impact of applications and the relative importance of each application in the portfolio to the business. APM attempts to justify and measure the financial benefits of each application relative to the costs of the applications’ maintenance and operations. Performing APM successfully is nevertheless a complicated issue, and something that many businesses are challenged with on a daily basis. New applications are constantly and regularly added, downloaded, purchased or self-developed – too often without any further control. In order to regain the control of the software that automates the business, and ensuring that the applications adds value and reliability to the company, Scania CV AB requires a rigorous and comprehensive method for an APM approach. In this master thesis together with Erik Nylén’s thesis 1, such a method is provided. The thesis also offers a suggestion on how to proceed with the APM effort at Scania CV AB.

This study examines the relationship between firm innovation and Initial Public Offering (IPO) underpricing in the Swedish stock market by examining 287 firms that went public on the Nasdaq OMX Stockholm and Nasdaq First North during the years 2010 – 2020. An OLS regression model is utilized to analyze the relationship between underpricing, measured as the initial returns, and firm innovation, measured as patents and Research and Development (R&amp;D). The average initial returns for the sample were (+8,16 %) showing that IPOs are, on average, underpriced in the Swedish stock market. While the connection between patents and underpricing was negligible, the results indicated that firms that reported R&amp;D expenditures separately, specifying how much of their expenditures were spent on R&amp;D, experienced a small decrease in IPO underpricing. Also, a slightly larger decrease in IPO underpricing was found for the firms that both had patents and reported their IPO expenditures separately. Thus, these results indicate that firms with a higher level of innovation are “leaving less money on the table”.

(English) The R&D management system was examined in terms of legislation, managing authorities, types of support, support providers, budget and strategic documents in this thesis. In the area of strategic documents, persistent shortcomings were revealed and manifested in non-specific interconnections or overlaps. At the same time, a qualitative shift in the quality of the documents was identified. Furthermore, it was examined whether the strategic measures for the development in the field of molecular biology were fulfilled in more detail. The research was carried out on data related to targeted support, which were obtained from the R&D Information System. Two periods in the years 1995-2014 were analyzed. The structure of the second period from 2005 to 2014 was related to the structure of the first period from 1995 to 2004, which served as a reference. In relation to strategic measures, research has shown that resources have been optimized, capacities have been strengthened and infrastructure has been massively developed. Keywords research, development, innovation, targeted support, R&D policy, molecular biology

To measure the performance of research and development organizations has long been a difficult task and still is partly due to the complex nature of its processes and activities, but also since the outcome in many cases can be seen first after many years. Also, the outcome is dependent on efforts from several other business functions within an organization. There has been a shift in how organizations view R&amp;D, from being technology-push centered, where R&amp;D had full responsibility of all innovations, to collaborating with innovation across functions within a company. Historically, R&amp;D has been considered to be impossible to manage and control, but as the development has taken place R&amp;D is now aligned with an organization’s business strategy. There is a vast amount of literature on performance measurement systems with focus on R&amp;D to access, however, the focus of that research has been on evaluating performance of an entire R&amp;D department or a specific project and not as much can be found on how to evaluate R&amp;D related activities, which is what this thesis centers on. The research in this thesis has been done by conducting a case study at Sandvik Materials Technology’s R&amp;D department in Sandviken, Sweden. Three case study objects have been studied within the case study and these objects are the OCTG project, non-destructive testing and hydraulic &amp; instrumentation tubing. The case study consisted of interviews with employees at various functions within the company, an extensive literature review as well as a review of internal documentation. The result from the case study has been the design of a performance measurement  ramework and its application to the three case study objects, illustrating that it is possible to measure the performance of R&amp;D related activities, thus, enabling a more transparent view of what value R&amp;D contributes with. The framework is created in a way that allows for other organizations with similar settings as the one currently in place at Sandvik Materials Technology to utilize it. Implications from the findings have an impact both from an industrial and research perspective, but also from a sustainability perspective. The industrial implication is that a framework for evaluating and illustrating the performance of a R&amp;D organization on an activity level has been designed. Considering the research aspects, this research contributes to the identified gap in the existing body of knowledge, providing additional knowledge on performance measurement systems on an activity level. From a sustainability perspective the framework enables monitoring and supervising of important processes, which could stimulate employees to undertake necessary actions, potentially leading to reduced negative impact on the environment since a lesser amount of resources and energy is consumed. / Att mäta prestationen av forskning- och utvecklingsorganisationer har länge varit en svår uppgift, vilket det fortfarande delvis är på grund av de komplexa processer och aktiviteter som existerar. Detta beror även på att resultatet av forskning och utveckling (FoU) ej synliggörs förrän långt senare. Vidare är resultatet av FoU beroende av insatser från andra funktioner inom en organisation. Det har skett ett skifte i hur organisationer ser på forskning och utveckling, från att tidigare varit drivna av att utveckla teknologier med fullständigt ansvar för innovationer till att nu arbeta med innovation över funktionsgränserna som existerar i en organisation. Historiskt sett har FoU setts som omöjligt att styra och kontrollera men i takt med att skiftet har skett så är forskning och utveckling nu i linje med en organisations affärsstrategi. Litteratur på ämnet prestationsmätningssystem med fokus på FoU finns att tillgå, men fokus i de studierna har varit att utvärdera prestationen av hela FoU-organisationer eller specifika projekt. Desto mindre finns på ämnet hur man utvärderar FoU-relaterade aktiviteter, vilket är fokus i denna studie. Studien i detta arbete har utförts som en fallstudie på Sandvik Materials Technology’s forsknings- och utvecklingsenhet i Sandviken, Sverige. Tre fallstudieobjekt har studerats inom fallstudien och dessa objekt är OCTG-projektet, oförstörande provning och hydraulik- och instrumentrör. Fallstudien har bestått av intervjuer med anställda på diverse funktioner inom företaget och en extensiv genomgång av litteratur har gjorts samt en genomgång av intern dokumentation. Resultatet från fallstudien blev skapandet av ett ramverk för prestationsmätning och en tillämpning på de tre fallstudieobjekten, vilket syftar till att illustrera möjligheten att mäta prestationen av FoU-relaterade aktiviteter. Detta leder till en mer transparent syn på vilket värde forskning och utveckling bidrar med. Ramverket har skapats på ett sätt som möjliggör organisationer med liknande struktur som existerar på Sandvik Materials Technology att utnyttja det. Implikationerna från resultaten har en inverkan både ur ett industriellt perspektiv och ur ett forskningsperspektiv men även ur ett hållbarhetsperspektiv. Den industriella implikationen är att ett ramverk för utvärdering och synliggörande av prestationer av en forsknings- och utvecklingsorganisation på en aktivitetsnivå har skapats. Vid betraktande av forskningsperspektivet så bidrar denna studie till att fylla det identifierade gapet i kunskapsbanken genom att tillföra ytterligare kunskap av prestationsmätning på en aktivitetsnivå. Ramverket möjliggör övervakning och kontroll av viktiga processer, vilket kan motivera anställda att vidta nödvändiga åtgärder, som kan leda till reducerad negativ inverkan på miljön då en mindre mängd resurser och energi används.

Sedan upptäckten av endogen ekonomisk tillväxt under senare delen av 1980-talet har det gång på gång visats i studier att tillväxt uppstår inifrån ekonomin, där FoU är en medverkande faktor. På samma sätt har forskning och utveckling visats bidra till tillväxten med produktivitetshöjande kunskap som överförs till ekonomin. Den här uppsatsen fokuserar på digitaliseringens roll i FoU och hur den kan fungera som ett verktyg för innovation. / Since the adoption of the endogenous growth theory in the late 1980s it has time and again been shown that growth is an endogenous effect of an economic system, in which knowledge and innovation are common contributing factors. Likewise, investments conducted in Research and Development has also been demonstrated to contribute to economic growth with productivity increasing knowledge spilling over in the economy. This study focuses on the role of digtalisation in R&amp;D and how it could be an important tool for innovation development.

Syftet med studien var att undersöka hur kommunikationen påverkar effektiviteten i produkt-och processutvecklingen i en samlokaliserad miljö. Tidigare studier har visat att det finns fördelar med samlokalisering av produkt- och processutveckling och produktion. Det påstås att det finns en indirekt relation mellan samlokalisering, prestanda och innovation. Men få djupstudier har lyft fram fördelarna med samlokalisering och samtidigt behandlat kommunikationsaspekten. Detta bildade grunden till följande frågeställning Hur påverkar kommunikationen effektiviteten i produkt- och processutveckling i en samlokaliserad miljö? För att undersöka frågeställningen gjordes en kvalitativ fallstudie bestående av tre olika typer av datainsamlingsmetoder; intervjuer i tre omgångar, en kontinuerlig undersökning och ett frågeformulär. Kommunikationsfördelarna som skapades genom att företaget var samlokaliserat bidrog till att problem kunde identifieras tidigare i processen. De gav också möjlighet för produkt och process utvecklingen att få snabbare återkoppling och kortare beslutsvägar. Genom att kommunicera på detta sätt drog man också nytta av erfarenheter och idéer från alla företagets avdelningar. Allt detta bidrog till en effektivare produkt- och processutveckling. / The purpose of this study was to examine how communication patterns affect the efficiency of product- and process development in a co–located environment. Previous studies have shown that there are a number of benefits with co-location of product- and process development and production. It is suggested that there is an indirect relationship between co-location and performance and innovativeness. However, few in depth studies have targeted the actual benefits of co-location and the aspect of communication. This was the foundation for the research question in this study. How do communication patterns affect the efficiency of product- and process development in a co –located environment? To investigate the research question, a qualitative single case study was executed including three types of data collection methods; interviews in three rounds, a continuous study and a questionnaire. The communication related benefits were shown to enable the company to identify issues earlier in the development process. The level of communication also provided the product-and process development with quicker feedback-loops and shorter decision paths. Taking advantage of the experience, ideas and "know-how" from the different departments enabled the company to benefit from all its internal resources. The communicational benefits were shown to have created a more efficient product- and process development at the case company