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Accounting Treatment of R&D for Environmentally Responsible Firms: Evidence from South Korea

Author

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  • Suyon Kim

    (Department of Accounting, Jeonbuk National University, Jeonju 54896, Korea)

  • Jaehong Lee

    (Division of Accounting/Tax and Management Information Systems, Kyonggi University, Suwon 16227, Korea)

Abstract

The purpose of this paper is to investigate the relationship between corporate environmental responsibility (CER) and R&D accounting treatment. Using firms listed in the Korea Stock Exchange (KSE) market between the years 2014 and 2018, this study not only investigates this relationship but also expands upon CER activities in various aspects, such as environmental performance strategy, environmental performance organization, and environmental shareholders. Furthermore, the positive association between various CER activities and R&D capitalization is significant in a highly competitive market. This relationship is robust with an alternative measure of CER activities and firm-fixed effects. This result implies that firms participating in CER activities focus on sustainable commercial success, unlike other firms.

Suggested Citation

  • Suyon Kim & Jaehong Lee, 2020. "Accounting Treatment of R&D for Environmentally Responsible Firms: Evidence from South Korea," Sustainability, MDPI, vol. 12(8), pages 1-16, April.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:8:p:3418-:d:348888
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