R&D-based earnings management, accounting performance and market return : Evidence from national-recognized enterprise technology centers in China

Purpose – The purpose of this paper is to provide a theoretical support for managers and investors and help them to identify corporate investment decisions on research and development (R&D) rationally. Design/methodology/approach – Grouping and regression analysis are employed in the research. Findings – The paper finds that managers in firms with medium accounting performance and at the border of profit target are prone to manage earnings by real R&D transactions, namely reducing R&D expenditures. Originality/value – The conclusions are of great significance for innovation promotion in China.