The Impact of Capitalizing R&D Expenditure on the Execution of Enterprise Innovation Strategy Management

With the in-depth implementation of the innovation-driven development strategy and intensifying market competition, enterprises are paying increasing attention to R&D activities, and R&D investment has become an important indicator for measuring innovation capability and development potential. As a key accounting treatment method, the capitalization of R&D expenditure has a distinctly dual effect on the execution of enterprise innovation strategy management. On the one hand, it can optimize corporate financial statements, enhance financing capacity in the capital market, encourage sustained R&D investment, and provide accurate accounting information to support resource allocation for innovation strategies, thus promoting effective implementation. On the other hand, its application may lead to increased financial risks, short-termism in innovation strategy execution, and difficulties in information disclosure and regulation, posing challenges to the long-term advancement of innovation strategies. This paper systematically analyzes the positive and negative impacts of R&D expenditure capitalization on the execution of innovation strategy management and proposes recommendations such as improving financial management systems, rationally planning R&D investment, and strengthening external support to help enterprises achieve sustainable, innovation-driven development.

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Publication Details

Journal
Scientific journal of economics and management research.
Published
2025-09-23
DOI
https://doi.org/10.54691/241zsa12
Primary Topic
Innovation Policy and R&D
Type
article
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article

The Impact of Capitalizing R&D Expenditure on the Execution of Enterprise Innovation Strategy Management

Yongbing Hao
Scientific journal of economics and management research.
Innovation Policy and R&D
article

The Impact of Capitalizing R&D Expenditure on the Execution of Enterprise Innovation Strategy Management

Yongbing Hao
article en

Abstract

With the in-depth implementation of the innovation-driven development strategy and intensifying market competition, enterprises are paying increasing attention to R&D activities, and R&D investment has become an important indicator for measuring innovation capability and development potential. As a key accounting treatment method, the capitalization of R&D expenditure has a distinctly dual effect on the execution of enterprise innovation strategy management. On the one hand, it can optimize corporate financial statements, enhance financing capacity in the capital market, encourage sustained R&D investment, and provide accurate accounting information to support resource allocation for innovation strategies, thus promoting effective implementation. On the other hand, its application may lead to increased financial risks, short-termism in innovation strategy execution, and difficulties in information disclosure and regulation, posing challenges to the long-term advancement of innovation strategies. This paper systematically analyzes the positive and negative impacts of R&D expenditure capitalization on the execution of innovation strategy management and proposes recommendations such as improving financial management systems, rationally planning R&D investment, and strengthening external support to help enterprises achieve sustainable, innovation-driven development.

Scientific journal of economics and management research.Vol. 7(9)
Xi’an Jiaotong-Liverpool University (CN)
Openalex Percentile: Top 65%
Innovation Policy and R&D
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