R&amp;D SPENDING AND FINANCIAL PERFORMANCE: AN INVESTIGATION IN AN EMERGING MARKET

Özkan, Nasıf

doi:10.17130/ijmeb.964849

Cited by 9 publications

(14 citation statements)

References 50 publications

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“…ROA is a direct characteristic of the profitability of the enterprise. At the same time, it is a dependent variable in establishing the relationship with the R&D of the enterprise proposed by Archarungroj and Hoshino (1999), Ayaydin andKaraaslan (2014), Varahrami (2015), Freihat and Kanakriyah (2017), Erdogan and Yamaltdinova (2019), Eldawayaty (2020), Kliestik et al (2020), Nandy (2020), Shasha (2021), Ozkan (2022).…”

Section: Sources: Developed By Authorsmentioning

confidence: 99%

“…Shasha (2021) examined the effect of R&D expenses on profitability (ROA, Profit Margin) of Chinese listed companies from 2015 to 2017 and confirmed that the intensity of investment in R&D positively affects the profitability of enterprises. Ozkan (2022) investigated the impact of R&D spending on the financial performance of the 500 largest Turkish industrial firms for the 2013-2019 periods using 12 panel data models. He found that current year R&D spending affects financial performance http://mmi.fem.sumdu.edu.ua/en negatively.…”

Section: Introductionmentioning

confidence: 99%

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The Impact of Innovation on the Profitability of Slovak Pharmaceutical Companies

Lehenchuk

Tumpach

Vyhivska

et al. 2022

MMI

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In conditions of the knowledge economy and innovations, research and development activities are among the most important factors affecting companies' financial performance. This study aims to investigate the impact of research and development activities on the profitability of Slovak pharmaceutical companies. The panel dataset consists of 37 sample pharmaceutical companies for 2015-2019. Panel data regression analysis was used as the main research method of the study. Profitability was measured with the return on assets indicator, chosen as the dependent variable. The independent variables are leverage, research and development intensity, research and development intensity squared, size, and high-tech dummy. The empirical analysis includes descriptive statistics, normality test, autocorrelation test, and panel regression models (random effect model) followed by F-statistics test, Hausman test, and Breusch-Pagan test. The hypothesis that there is a significant positive impact of research and development activities on the profitability of knowledge-intensive enterprises has been partly confirmed. Only the research and development intensity squared has a significant positive impact on the profitability of Slovak pharmaceutical companies at a 1% level. On the contrary, the research and development intensity has a significant negative relation. According to the analysis results, control variables (leverage, size, and high-tech dummy) have no significant influence on profitability. The existence of an inverted-U relationship between research and development activities and the profitability of Slovak pharmaceutical companies has been established. Investing in innovations of Slovak pharmaceutical companies has a positive effect on profitability only from a certain amount and has an upper limit on the amount of profitable investment. Thus, to formulate recommendations on the adjustment of investment policy in research and development activities, it is necessary to conduct future research to determine the entry points and exit points from the area of best profitability on inverted-U function.

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Section: Sources: Developed By Authorsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Impact of Innovation on the Profitability of Slovak Pharmaceutical Companies

Lehenchuk

Tumpach

Vyhivska

et al. 2022

MMI

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“…To improve it, the use of robust estimators was proposed, which allow outliers in a model to be identified and their impact on the results of panel data regression analysis to be minimized or eliminated. Such a practice of model estimation with robust standard errors is quite common among scientists who analyze the relationship between the R&D and profitability of a company (Özkan, 2022(Özkan, , Chou et al, 2022.…”

Section: Source: Calculated Via Gretl Software Packagementioning

confidence: 99%

“…A literature review on the problems of R&D investment shows, in general, that investing has a positive impact on business activities (Griliches, 1979;Archarungroj & Hoshino, 1999;Del Monte & Papagni, 2003;Jen Huang & Ju Liu, 2005;Nord, 2011;Özkan, 2022). However, studies conducted by many scientists provide a significant number of warnings related to the feasibility, intensity, and effectiveness of R&D investments for a diverse range of enterprises varying by share of high-tech or low-tech sectors, different stages of innovation, economic development, science intensity, etc.…”

Section: Introductionmentioning

confidence: 99%

Untitled

2022

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In the knowledge economy, the activities of knowledge-intensive enterprises largely depend on the effectiveness of intellectual capital management and the processes of its creationresearch and development (R&D). The present paper analyzes the relationship between the R&D and profitability of the Slovak medical device companies, which belong to high-value-added, knowledge-intensive industries. A sample of 26 companies operating in the Slovak medical device indus-try for the period of 2015 to 2019 is considered. For data analysis purposes, GRETL software is used. The current study deploys the panel data regression analysis methodology.

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“…On the other hand, many studies indicate that the positive relationship of RDI on companies' profitability is the most commonly found in the longterm analysis, and the effect can be interpreted with the inversed U-shape. Ozkan (2022) analysed 500 industrial firms in Turkey for the period 2013-2019. According to his findings, R&D expenditures have a negative impact on the current year's financial performance measured by ROE, ROA and ROS (Return on Sales) and this influence will turn positive after a year.…”

Section: The Link Between Randd Investments Rdi Return On Randd Inves...mentioning

confidence: 99%

THE IMPACT OF R&D ACTIVITY ON THE BUSINESS PERFORMANCE OF HIGH-TECHNOLOGY COMPANIES

Janjić

Krstić²,

Milanović³

2022

FU Econ Org

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This paper aims to examine the influence of R&D activity on the business performance of high-technology companies. In order to provide an empirical investigation of the impact of R&D activity on the business performance of high-technology companies, correlation and regression analyses have been utilized.This study discovered that investment in R&D has a positive influence on EBIT, net earnings, EBITDA, and total assets, while its influence on ROA was confirmed to be statistically significant and negative. Additionally, the influence of R&D intensity performance indicator (RDI) on ROA as a short-term financial performance indicator was not confirmed. The study revealed that return on R&D investment (RORDI) has a statistically significant and positive influence on ROA in the current, observed year.The evaluation of the obtained results can be a basis for drawing more detailed conclusions, contributing to the future R&D strategy and existing literature, and emphasizing the importance of R&D investment for various business performances.The originality of this study is reflected in the comprehensive analysis of the influence of specific indicators of R&D activity, such as RORDI, on the business performance of high-technology companies. This paper is also beneficial because none of the existing studies have explored the impact of investment in R&D on EBITDA.

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R&D SPENDING AND FINANCIAL PERFORMANCE: AN INVESTIGATION IN AN EMERGING MARKET

Cited by 9 publications

References 50 publications

The Impact of Innovation on the Profitability of Slovak Pharmaceutical Companies

The Impact of Innovation on the Profitability of Slovak Pharmaceutical Companies

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THE IMPACT OF R&D ACTIVITY ON THE BUSINESS PERFORMANCE OF HIGH-TECHNOLOGY COMPANIES

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