#4861. Earnings pressure and R&D cut: the moderating effects of family control and debt

August 2026publication date
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Journal’s subject area:
Business, Management and Accounting (all);
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Abstract:
This study aims to analyze the link between earnings pressure and R&D cut as well as the moderating effects of family control and debt. In total, 6,130 firm-year observations of Taiwanese-listed firms were used to test the hypotheses by using a panel data regression with fixed effects estimation. The study reveals that earnings pressure is positively related to R&D cut, and this relationship can be softened when having the presence of family control and debt. This study is conducted based on some conditions: data collection comes from a single source, earnings pressure mainly comes from analysts, R&D intensity is significant among industries, debt is a given condition to managers. Under the pressure of meeting analyst forecast, managers have more opportunities to flourish their priority on improving temporary profits rather than implementing R&D investments with costly budget but unpredictable outcomes. In addition to responding to the positive effect of earnings pressure on trimming long-term corporate investments, this study also found some corporate governance mechanisms to soften the managerial short-termism behavior.
Keywords:
Debt; Earnings pressure; Family control; R&D cut

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