Asymmetric adjustment of R&D expenditure in Chinese listed companies

This article establishes the correlation model of R&D expenditure and operating revenue by using the sample of Chinese listed companies between 2011 and 2016. We find that the relationship between R&D adjustment and revenue is asymmetric, that is, R&D expenditure increases more when revenue rises than R&D expenditure decreases when revenue falls by an equivalent amount. The outcome shows that R&D expenditure increases on an average of 0.634% per 1% increase in revenue but decreases only 0.401% per 1% decrease in revenue. Furthermore, this paper examines that R&D expenditure stickiness is less pronounced when revenue declines in the preceding period, but rises when macroeconomic grows and the degree of employee intensity increases. In addition, the stickiness of R&D expenditure is higher in stateowned enterprises compared with private-owned enterprises. Research on R&D expenditure stickiness can help uncover the "black box" of managers' adjustment in R&D expenditures.