Investor sentiment, R&D spending and firm performance

Figures & data

Table A2. Variable definitions.

Variables	Definitions
R&D/Total assets	The ratio of R&D spending-to-total assets
R&D/ Sales	The ratio of R&D spending-to-sales
Optimism	A dummy variable that equals 1 if optimism dominates the stock price, 0 otherwise.
Pessimism	A dummy variable that equals 1 if pessimism dominates the stock price, 0 otherwise.
ROA	The EBIT-to-total assets ratio
Fundamental_Q	The fundamental part of Tobin’s Q
Adjusted_ROA	$\mathit{Adjusted}\_\mathit{ROA}=\mathit{ROA}+(1-\frac{\mathit{Total}\mathit{income}\mathit{tax}}{\mathit{Income}\mathit{before}\mathit{tax}})\times \frac{R\&D\mathit{spending}}{\mathit{Total}\mathit{assets}}$, where ROA is calculated as the ratio of EBIT-to-total assets.
Industry_return	The median of industry firms’ annual dividend reinvested stock returns
Size	The natural logarithm of total assets
Leverage	The ratio of total debts-to-total assets
PPE	The net value of property, plant and equipment scaled by total assets
Competition	The number of firms that are operated in an industry
Advertisement	The ratio of advertisement expense-to-sales
Cash_dividend	The cash dividend payment per share
Institution	The ratio of shares held by institutional investors to total shares
QFII_ratio	The ratio of shares held by QFIIs to total shares
Top5	The proportion of stocks held by the top five shareholders
Timeop	A dummy variable that equals 1 if firms announce equity issuance when optimism causes stock overpricing, 0 otherwise.
Timepe	A dummy variable that equals 1 if firms announce equity repurchase when pessimism causes stock under-pricing, 0 otherwise.
Cash_rich	A dummy variable that equals 1 if cash reserves are above the sample median, 0 otherwise. Cash reserves are the sum of cash and short-term investments
Cater	A dummy variable that equals 1 if the share turnover ratio is beyond the sample median, 0 otherwise.
State	A dummy variable that equals 1 when shares owned by central and local governments in a firm are higher than the sample median, 0 otherwise.
QFII	A dummy variable that equals 1 if shares owned by QFIIs in a firm are higher than the sample median, 0 otherwise.

Table 1. Summary statistics.

Variables	Obs.	Mean	Std. Dev.	Min	Max
R&D/Total assets	29,473	0.002	0.005	0	0.035
R&D/Sales	29,473	0.004	0.013	0	0.095
ROA	29,473	0.058	0.061	−0.208	0.24
Adjusted_ROA	29,473	0.071	0.065	−0.198	0.258
Fundamental_Q	29,473	0.568	0.287	−0.162	1.269
Size	29,473	22.023	1.292	19.528	25.999
Industry_return	29,473	0.314	0.625	−0.617	2.541
Leverage	29,473	0.434	0.211	0.05	0.94
PPE	29,473	0.226	0.169	0.002	0.724
Optimism	29,473	0.562	0.496	0	1
Pessimism	29,473	0.432	0.495	0	1

Source: self-made.

Table 2. Investor sentiment and the R&D spending-firm performance relationship.

A
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Optimism)i:1-year lag	−0.209	−0.333	0.833*	−0.099	−0.141	0.104**
	(-0.957)	(-1.402)	(1.735)	(-0.975)	(-1.259)	(2.270)
2-year	0.540***	0.628***	−0.588	0.054***	0.089***	0.053
	(2.747)	(3.059)	(-1.006)	(3.310)	(4.956)	(0.651)
3-year	−0.139	−0.093	0.214	−0.064	−0.056	−0.009
	(-0.749)	(-0.439)	(0.392)	(-0.794)	(-0.603)	(-0.074)
Constant	0.050**	0.021	4.121***	0.077***	0.078***	4.122***
	(2.498)	(0.952)	(66.467)	(3.941)	(3.285)	(66.463)
Industry and year fixed effects, controls, lagged Optimism and R&D	yes	yes	yes	yes	yes	yes
R^2	0.030	0.037	0.428	0.033	0.034	0.428
Observations	18,051	18,051	18,051	18,051	18,051	18,051
B
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Pessimism)i:1-year lag	0.224	0.260	−4.020**	−0.015	0.025	−0.425**
	(0.905)	(0.962)	(-2.196)	(-0.327)	(0.308)	(-1.975)
2-year	−0.517**	−0.682***	0.346	−0.011*	−0.161**	−0.133
	(-2.398)	(-3.069)	(0.610)	(-1.849)	(-2.326)	(-0.942)
3-year	0.076	0.043	0.298	0.023	0.006	0.040
	(0.358)	(0.183)	(0.808)	(0.453)	(0.085)	(0.718)
Constant	0.091***	0.087***	4.118***	0.097***	0.056***	4.334***
	(4.235)	(3.368)	(66.097)	(7.542)	(3.430)	(51.293)
Industry and year fixed effects, controls, lagged Pessimism and R&D	yes	yes	yes	yes	yes	yes
R^2	0.032	0.034	0.428	0.046	0.049	0.395
Observations	18,051	18,051	18,051	18,051	18,051	18,051

Note: This table presents the results of the effect of investor sentiment on the R&D spending-firm performance relationship. The fixed effects model (FEM) is used. Robust z-statistics are in parentheses.

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Source: self-made.

Table 3. IV regressions.

A
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Optimism)i:1-year lag	−71.000	39.725	20.755*	20.784	38.955	−13.904
	(-1.001)	(0.750)	(1.850)	(1.064)	(1.622)	(-1.031)
2-year	34.673**	22.263*	−32.542	7.239**	4.428*	−30.020
	(2.181)	(1.656)	(-1.451)	(1.967)	(1.788)	(-1.584)
3-year	35.939	20.016	10.095	11.407	7.004	32.852*
	(0.702)	(0.563)	(0.396)	(0.725)	(0.349)	(1.858)
Constant	−0.106***	−0.113***	3.297***	−0.026	−0.038	3.275***
	(-3.014)	(-4.540)	(105.539)	(-1.082)	(-1.288)	(68.344)
Industry and year fixed effects, controls, lagged Optimism and R&D	yes	yes	yes	yes	yes	yes
Wald chi^2	604.40***	2584.92***	39210.37***	894.73***	5536.37***	20903.40***
Observations	17,892	17,892	17,892	17,892	17,892	17,892
B
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Pessimism)i:1-year lag	−8.587	−7.143	−55.166*	−1.914	−3.013	−148.156**
	(-0.300)	(-0.226)	(-1.748)	(-0.631)	(-0.647)	(-2.024)
2-year	−52.118*	−61.332*	67.307	−11.102*	−8.722*	9.065
	(-1.824)	(-1.953)	(1.640)	(-1.885)	(-1.672)	(1.065)
3-year	25.270	25.178	−20.513	6.117	4.181	3.567
	(1.543)	(1.409)	(-1.163)	(1.459)	(0.656)	(0.360)
Constant	−0.126***	−0.165***	3.307***	−0.024	−0.121***	4.328***
	(-4.087)	(-4.876)	(76.033)	(-1.355)	(-4.036)	(58.399)
Industry and year fixed effects, controls, lagged Pessimism and R&D	yes	yes	yes	yes	yes	Yes
Wald chi2	823.10***	1420.80***	29048.73***	1590.11***	2237.48***	28364.35***
Observations	17,892	17,892	17,892	17,892	17,892	17,892

Note: This table presents the results of IV regressions. Columns (1) to (3) ((4) to (6)) adopt ROA, Adjusted_ROA and Fundamental_Q respectively. Robust Z-statistics are in parentheses.

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Source: self-made.

Table 4. PSM regressions.

A
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Optimism)i:1-year lag	−0.001	0.001	0.008	−0.009	−0.006	0.013*
	(-0.187)	(0.138)	(1.065)	(-1.625)	(-1.524)	(1.666)
2-year	0.008**	0.008*	0.000	0.006	0.007*	−0.009
	(1.979)	(1.959)	(0.009)	(1.058)	(1.661)	(-0.902)
3-year	−0.001	−0.000	−0.002	−0.000	−0.001	0.000
	(-0.318)	(-0.038)	(-0.308)	(-0.016)	(-0.208)	(0.025)
Constant	−0.005	−0.047	3.332***	0.585***	0.450***	4.117***
	(-0.139)	(-1.325)	(56.176)	(4.858)	(4.044)	(44.011)
Industry and year fixed effects, controls, lagged Optimism and R&D	yes	yes	yes	yes	yes	yes
R^2	0.036	0.015	0.348	0.080	0.056	0.365
Observations	3,924	3,924	3,924	3,805	3,805	3,805
B
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Pessimism)i:1-year lag	0.001	−0.001	−0.008	0.009	0.006	−0.014*
	(0.155)	(-0.160)	(-1.131)	(1.561)	(1.511)	(-1.671)
2-year	−0.008*	−0.008*	−0.000	−0.006	−0.007*	0.010
	(-1.835)	(-1.858)	(-0.059)	(-1.027)	(-1.659)	(1.039)
3-year	0.002	0.001	0.002	0.001	0.001	−0.001
	(0.398)	(0.136)	(0.233)	(0.092)	(0.260)	(-0.104)
Constant	0.008	−0.035	3.344***	0.599***	0.454***	4.122***
	(0.234)	(-0.977)	(56.183)	(5.143)	(4.088)	(42.871)
Industry and year fixed effects, controls, lagged Pessimism and R&D	yes	yes	yes	yes	yes	yes
R2	0.036	0.015	0.348	0.081	0.056	0.365
Observations	3,924	3,924	3,924	3,805	3,805	3,805

Note: This table exhibits the results of PSM regressions. Columns (1) to (3) ((4) to (6)) adopt ROA, Adjusted_ROA and Fundamental_Q respectively. FEM is used. Robust Z-statistics are in parentheses.

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Source: self-made.

Table A1. PSM results.

	Treated mean	Control mean	T-C
ROA	0.053	0.054	−0.001
Adjusted_ROA	0.072	0.070	0.002
Fundamental_Q	0.578	0.572	0.006
Size	22.220	22.179	0.041
Leverage	0.420	0.427	−0.007
Industry_return	0.223	0.242	−0.019
PPE	0.185	0.198	−0.013***

Note: *** p < 0.01, ** p < 0.05, * p < 0.1.

Table 5. Additional controls.

A
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Optimism)i:1-year lag	−0.220	−0.343	0.829*	−0.102	−0.143	0.095**
	(-1.032)	(-1.489)	(1.691)	(-1.005)	(-1.330)	(2.253)
2-year	0.494**	0.574***	−0.556	0.163*	0.219**	−0.082
	(2.566)	(2.867)	(-0.915)	(1.883)	(2.514)	(-0.316)
3-year	−0.070	−0.032	0.338	−0.060	−0.058	0.086
	(-0.398)	(-0.154)	(0.602)	(-0.843)	(-0.669)	(0.357)
Constant	0.099***	0.056***	4.384***	0.098***	0.055***	4.383***
	(5.575)	(2.870)	(52.910)	(5.542)	(2.784)	(52.905)
Industry and year fixed effects, controls, lagged Optimism and R&D	yes	yes	yes	yes	yes	yes
R^2	0.075	0.084	0.400	0.075	0.084	0.400
Observations	18,051	18,051	18,051	18,051	18,051	18,051
B
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Pessimism)i:1-year lag	0.213	0.235	−0.829*	0.005	0.093	−0.386*
	(0.885)	(0.894)	(-1.673)	(0.080)	(0.755)	(-1.751)
2-year	−0.453**	−0.616***	0.344	−0.015**	−0.218**	−0.044
	(-2.126)	(-2.822)	(0.585)	(-2.458)	(-2.244)	(-1.215)
3-year	0.039	0.000	−0.144	0.028	0.005	0.095
	(0.198)	(0.000)	(-0.257)	(0.461)	(0.048)	(0.873)
Constant	0.122***	0.100***	4.386***	0.120***	0.098***	4.522***
	(6.542)	(4.621)	(61.896)	(8.842)	(4.545)	(48.794)
Industry and year fixed effects, controls, lagged Pessimism and R&D	yes	yes	yes	yes	yes	yes
R^2	0.076	0.084	0.424	0.096	0.083	0.380
Observations	18,051	18,051	18,051	18,051	18,051	18,051

Note: This table includes additional control variables. Columns (1) to (3) ((4) to (6)) adopt ROA, Adjusted_ROA and Fundamental_Q. FEM is used. Robust Z-statistics are in parentheses.

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Source: self-made.

Table 6. Market-timing.

A
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Timeop)i:1-year lag	−2.836	−3.616	20.319***	−0.001	0.045	10.135**
	(-0.680)	(-1.127)	(2.798)	(-0.023)	(0.558)	(2.476)
2-year	0.262*	−0.075	−2.494	0.074*	0.067*	1.537
	(1.701)	(-0.524)	(-0.338)	(1.727)	(1.782)	(0.366)
3-year	2.352	0.319	4.825	−0.013	0.060	1.568
	(0.354)	(0.095)	(0.815)	(-0.268)	(1.130)	(0.422)
Constant	−0.019	0.026	4.138***	−0.022	−0.034	3.292***
	(-0.587)	(1.165)	(66.583)	(-0.706)	(-0.931)	(58.844)
Industry and year fixed effects, controls and lagged R&D and Timeop	yes	yes	yes	yes	yes	yes
R^2	0.044	0.037	0.433	0.045	0.024	0.392
Observations	18,051	18,051	18,051	18,051	18,051	18,051
B
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Timepe)i:1-year lag	0.296	0.238	1.691	−0.023	0.950	−0.281
	(0.166)	(0.115)	(0.292)	(-0.028)	(0.661)	(-0.110)
2-year	−4.954*	−6.025**	−5.201	−2.796**	−3.580*	−2.048
	(-1.943)	(-2.272)	(-0.646)	(-2.356)	(-1.752)	(-0.599)
3-year	−5.322*	−3.497	−21.876**	−0.015	0.031	−9.166**
	(-1.945)	(-1.185)	(-2.242)	(-0.134)	(0.128)	(-2.173)
Constant	0.071***	0.055***	4.346***	0.070***	0.024	4.037***
	(4.818)	(3.343)	(60.677)	(4.792)	(1.100)	(69.273)
Industry and year fixed effects, controls and lagged R&D and Timepe	yes	yes	yes	yes	yes	yes
R^2	0.039	0.050	0.418	0.040	0.038	0.424
Observations	18,051	18,051	18,051	18,051	18,051	18,051

Note: This table presents the results of the market-timing effect. Columns (1) to (3) ((4) to (6)) adopt ROA, Adjusted_ROA and Fundamental_Q. FEM is used. Robust Z-statistics are in parentheses.

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Source: self-made.

Table 7. Cash-rich firm.

	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Timepe*Cash_rich)i:1-year lag	−0.121	0.087	0.495	−0.230	0.022	0.148
	(-0.260)	(0.191)	(0.470)	(-0.912)	(0.183)	(0.339)
2-year	0.641*	0.702*	−1.029	0.454**	0.173*	0.163
	(1.773)	(1.698)	(-0.733)	(2.096)	(1.869)	(0.267)
3-year	−0.476	−0.838	2.537*	−0.308	−0.171	1.132**
	(-0.809)	(-1.484)	(1.664)	(-1.025)	(-1.053)	(1.966)
Constant	0.061***	0.054**	3.262***	0.059***	0.092***	3.259***
	(3.134)	(2.015)	(20.858)	(3.066)	(5.430)	(20.845)
Industry and year fixed effects, controls and l agged R&D, Timepe, Cash_rich, (Timepe*Cash_rich), (R&D*Timepe) and (R&D*Cash_rich)	yes	yes	yes	yes	yes	yes
R^2	0.036	0.040	0.426	0.038	0.052	0.427
Observations	18,051	18,051	18,051	18,051	18,051	18,051

Note: This table presents the results of the market-timing effect in cash-rich firms. Columns (1) to (3) ((4) to (6)) adopt ROA, Adjusted_ROA and Fundamental_Q. FEM is used. Robust Z-statistics are in parentheses.

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Source: self-made.

Table 8. Catering.

	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Cater)i:1-year lag	−1.228**	−0.787**	0.331	−0.302**	−0.307**	0.070
	(-2.185)	(-2.197)	(1.357)	(-2.038)	(-1.986)	(0.852)
2-year	0.497	0.468	0.683	0.022	0.154	0.040
	(1.003)	(1.532)	(1.207)	(0.162)	(1.139)	(0.132)
3-year	−0.218	−0.107	−0.130	−0.084	0.022	0.044
	(-0.509)	(-0.323)	(-0.211)	(-0.653)	(0.157)	(0.155)
Constant	−0.012	0.024	3.151***	0.051***	0.024	4.285***
	(-0.384)	(1.102)	(49.389)	(2.594)	(1.106)	(53.059)
Industry and year fixed effects, controls and lagged R&D and Cater	yes	yes	yes	yes	yes	yes
R^2	0.044	0.037	0.379	0.028	0.036	0.405
Observations	18,051	18,051	18,051	18,051	18,051	18,051

Note: This table exhibits the results of the catering effect. Columns (1) to (3) ((4) to (6)) adopt ROA, Adjusted_ROA and Fundamental_Q. FEM is used. Robust Z-statistics are in parentheses.

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Source: self-made.

Table 9. SOEs, investor sentiment and the R&D spending-firm performance relationship.

A
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Optimism*State)i:1-year lag	0.090	0.128	0.285	0.006	−0.142	0.023
	(0.711)	(0.477)	(0.366)	(0.073)	(-1.210)	(0.052)
2-year	−0.079	−0.334*	−1.229*	−0.023	−0.082	−0.618**
	(-1.355)	(-1.680)	(-1.746)	(-0.246)	(-0.816)	(-1.982)
3-year	0.069	0.789	0.524	0.139	0.065	0.019
	(0.636)	(1.616)	(0.587)	(1.530)	(0.560)	(0.048)
(R&D*Optimism)i:1-year lag	−0.022	−0.336	−0.010	−0.023***	0.045	−0.036
	(-0.308)	(-1.057)	(-0.023)	(-2.955)	(0.882)	(-0.195)
2-year	0.136**	0.873***	0.118	0.062	0.160***	0.129
	(1.986)	(3.635)	(0.224)	(1.569)	(3.416)	(0.610)
3-year	−0.029	−1.294	−0.145	−0.095**	−0.016	0.075
	(-0.373)	(-1.258)	(-0.258)	(-2.001)	(-0.337)	(0.330)
Constant	0.030***	−0.141***	3.273***	0.073***	0.040***	3.888***
	(3.968)	(-4.368)	(59.262)	(8.133)	(2.632)	(68.576)
Industry and year fixed effects, controls and lagged R&D, Optimism, State, (R&D*State) and (Optimism*State)	yes	yes	yes	yes	yes	yes
R^2	0.597	0.406	0.388	0.106	0.059	0.411
Observations	18,051	18,051	18,051	18,051	18,051	18,051
B
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Pessimism*State)i:1-year lag	0.327*	−0.058	0.144	0.155*	0.060	−0.201
	(1.652)	(-0.177)	(0.175)	(1.672)	(0.486)	(-0.516)
2-year	−0.012	0.093	0.733**	0.011	0.035	0.204*
	(-0.157)	(1.048)	(2.007)	(0.378)	(0.631)	(1.905)
3-year	−0.039	−0.112	−0.372	0.016	−0.157	−0.021
	(-0.163)	(-1.031)	(-0.716)	(0.159)	(-1.213)	(-0.049)
(R&D*Pessimism)i:1-year lag	−0.376	0.188	0.058	−0.042	0.101	0.162
	(-0.890)	(1.305)	(0.137)	(-0.886)	(1.643)	(0.881)
2-year	−0.604	−0.424***	−0.300	−0.290	−0.128**	−0.181
	(-1.447)	(-3.102)	(-0.570)	(-1.248)	(-2.140)	(-0.814)
3-year	0.066	0.543	−0.121	0.015	0.031	−0.050
	(0.556)	(1.004)	(-0.214)	(0.326)	(0.561)	(-0.225)
Constant	0.020**	0.057***	3.895***	−0.001	0.076***	3.872***
	(2.077)	(3.728)	(68.362)	(-0.072)	(4.091)	(67.292)
Industry and year fixed effects, controls and lagged R&D, Pessimism, State, (R&D* State) and (Pessimism* State)	yes	yes	yes	yes	yes	yes
R^2	0.102	0.052	0.410	0.060	0.134	0.428
Observations	18,051	18,051	18,051	18,051	18,051	18,051

Note: This table presents the results of the effect of SOEs and investor sentiment on the R&D spending-firm performance relationship. Columns (1) to (3) ((4) to (6)) adopt ROA, Adjusted_ROA and Fundamental_Q. FEM is used. Robust Z-statistics are in parentheses.

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Source: self-made.

Table 10. QFIIs, investor sentiment and the R&D spending-firm performance relationship.

A
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Optimism*QFII)i:1-year lag	−0.014	−0.396*	0.859	0.209	0.069	0.781
	(-0.058)	(-1.927)	(0.801)	(0.964)	(0.209)	(0.955)
2-year	−0.609**	0.156	−0.023	−0.427*	0.002	−0.796**
	(-2.161)	(0.435)	(-0.031)	(-1.647)	(0.010)	(-2.021)
3-year	−0.493	0.080	0.255	0.100	0.004	−0.561
	(-1.121)	(0.211)	(0.328)	(0.277)	(0.007)	(-0.655)
(R&D*Optimism)i:1-year lag	−0.821	0.257***	0.760	−0.858	−0.169	0.273
	(-1.012)	(5.860)	(1.558)	(-1.573)	(-1.471)	(1.160)
2-year	0.463**	0.301***	−0.471	0.255*	0.235**	−0.095
	(2.135)	(3.083)	(-0.773)	(1.689)	(2.519)	(-0.343)
3-year	0.033	0.004	0.314	0.013	−0.088	0.090
	(0.474)	(0.044)	(0.547)	(0.135)	(-0.971)	(0.373)
Constant	−0.073***	0.023**	4.347***	−0.083***	0.025	3.978***
	(-2.713)	(2.052)	(51.887)	(-2.610)	(1.136)	(62.191)
Industry and year fixed effects, controls and lagged R&D, Optimism, QFII, (R&D*QFII) and (Optimism*QFII)	yes	yes	yes	yes	yes	yes
R^2	0.177	0.173	0.394	0.019	0.037	0.426
Observations	18,051	18,051	18,051	18,051	18,051	18,051
B
	R&D/Total assets			R&D/Sales
	(1)	(2)	(3)	(4)	(5)	(6)
(R&D*Pessimism*QFII)i:1-year lag	−0.760	0.273	−0.883	−0.467	0.059	−0.364
	(-1.191)	(0.620)	(-0.499)	(-1.584)	(0.337)	(-0.451)
2-year	0.439*	0.276	0.836**	0.190*	0.136	0.360**
	(1.778)	(1.017)	(2.030)	(1.651)	(0.947)	(1.969)
3-year	−0.309	−0.600	−1.099	−0.188	−0.175	−0.393
	(-0.466)	(-0.847)	(-0.841)	(-0.636)	(-0.574)	(-0.643)
(R&D*Pessimism)i:1-year lag	1.300	0.789	−0.663	0.211	0.367	−0.314
	(1.095)	(0.635)	(-1.371)	(1.055)	(0.537)	(-1.410)
2-year	−0.632*	−0.792**	−0.114	−1.240**	−0.286**	−0.052
	(-1.864)	(-2.567)	(-0.448)	(-1.983)	(-2.152)	(-1.302)
3-year	−0.007	0.649	0.090	0.359	0.196	−0.008
	(-0.023)	(0.546)	(0.161)	(0.662)	(0.315)	(-0.034)
Constant	−0.018	−0.071**	3.977***	−0.019	−0.071**	3.976***
	(-0.568)	(-2.062)	(61.765)	(-0.601)	(-2.060)	(61.808)
Industry and year fixed effects, controls and lagged R&D, Pessimism, QFII, (R&D*QFII) and (Pessimism*QFII)	yes	yes	yes	yes	yes	yes
R^2	0.010	0.030	0.426	0.011	0.030	0.426
Observations	18,051	18,051	18,051	18,051	18,051	18,051

Note: This table presents the results of the effect of QFIIs and investor sentiment on the R&D spending-firm performance relationship. Columns (1) to (3) ((4) to (6)) adopt ROA, Adjusted_ROA and Fundamental_Q. EFM is used. Robust Z-statistics are in parentheses.

*** p < 0.01,

** p < 0.05,

* p < 0.1.

Source: self-made.

Data availability statement

Raw data were generated at Shenzhen SCMAR Data Technology Co., Ltd. Derived data supporting the findings of this study are available from the corresponding author on request.