Measuring the Economic Rate of Return on Assets

Measuring the Economic Rate of Return on Assets This paper (1) describes a procedure for correctingthe deficiencies associated with the accounting rateof return, and for capitalizing the intangible assetscreated by the firm's R & D expenditures; and (2)demonstrates the superiority of the derived measure ofrate of return in a fixed effects model testing therelative influence of firm and industry effects onreturns. Both of these influences are shown to bemuch stronger than in previous empirical work. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Measuring the Economic Rate of Return on Assets

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Publisher
Springer Journals
Copyright
Copyright © 2000 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1007890132456
Publisher site
See Article on Publisher Site

Abstract

This paper (1) describes a procedure for correctingthe deficiencies associated with the accounting rateof return, and for capitalizing the intangible assetscreated by the firm's R & D expenditures; and (2)demonstrates the superiority of the derived measure ofrate of return in a fixed effects model testing therelative influence of firm and industry effects onreturns. Both of these influences are shown to bemuch stronger than in previous empirical work.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 8, 2004

References

  • An Applied Econometrician's View of Large Company Performance
    Geroski, P. A.

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