The Impact of R&amp;D Innovation Success on the Relationship between R&amp;D Investment and Financial Leverage

O'Connell, Vincent; Abughazaleh, Naser M.; Tahat, Yasean; Whelan, Garvan

doi:10.3390/joitmc8030129

Cited by 9 publications

(6 citation statements)

References 65 publications

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“…Finally, in Model 5, the variables research and development, education, and ecological sustainability lose the statistical significance seen in the previous models, and the variable innovation partnerships emerge as the only one with statistical significance (p = 0.007), explaining 37.7% of the results (β = 0.377). The results are in line with previous studies, which indicate a significant relationship between knowledge management and innovation partnerships with innovation in companies (Bate et al 2023;Boiko 2022;De Silva et al 2018;Ferreira et al 2020;Lam et al 2021;O'Connell et al 2022;Popa et al 2022;Queirós et al 2019;Scaliza et al 2022;Townsend and Busenitz 2015;Wilson et al 2023;Coutinho and Au-Yong-Oliveira 2023).…”

Section: Resultssupporting

confidence: 92%

Innovation’s Performance: A Transnational Analysis Based on the Global Innovation Index

Coutinho,

Au-Yong-Oliveira

2024

Administrative Sciences

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The pandemic marked the beginning of a succession of events on a global scale (not the least of which is a greater concern for the environment and for quality of life/distance work) with a major impact on the economy. Innovation plays a key role in meeting the challenges of the future, but despite investment in innovation, global economic growth has fallen short of the expected performance. The aim of this study is to identify the factors with the greatest impact on the performance of innovation ecosystems based on the performance of the innovation ecosystems of 64 countries assessed by the Global Innovation Index 2022. The methodology consists of multiple hierarchical linear regressions, in which the impact factors on innovation ecosystems, measured through indicators, are the independent variables and innovation performance, in knowledge and technology and in creativity, are the dependent variables in an iterative process, using STATA/MP 18.0 data analysis software. The results indicate that human capital and research (the basis of business and innovative products aimed at filling gaps in the market are people with a good higher education, which is also linked to local university rankings) and business sophistication (highly qualified work, leveraging strategic partnerships, and with knowledge absorption capacity) are the main pillars determining innovation performance at a global level. Education (an educated workforce is of growing importance in the knowledge era), R&D investment (including support from the state in the form of tax incentives for whoever invests in R&D), innovation partnerships (for a faster, more open innovation effort), ecological sustainability (a new reinforced priority after COVID-19) and knowledge absorption (to absorb one must first detain valuable knowledge in the area) are the variables with the greatest impact on innovation performance. The work provides guidance on which areas should be prioritized in the development of policies and strategies to accelerate innovation in countries. The study is limited by the time frame and reveals, by comparison with pre-pandemic studies, that the determinants of innovation can be dynamic, varying according to the countries and, consequently, the global context of the analysis.

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Section: Resultssupporting

confidence: 92%

Innovation’s Performance: A Transnational Analysis Based on the Global Innovation Index

Coutinho,

Au-Yong-Oliveira

2024

Administrative Sciences

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“…Concerns regarding debt servicing and financial risk may impose constraints on firms with higher levels of financial leverage when seeking external financing for R&D projects. Consequently, such firms may exhibit lower R&D expenditure compared to those with lower leverage ratios (O'Connell et al, 2022).…”

Section: Determinants Of Corporate Randd Expenditurementioning

confidence: 99%

Global minds, local impact: Exploring the effect of foreign directors on corporate R&D expenditure

Pu,

Zulkafli

2024

Strategic Management

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Background: In the contemporary business environment, corporate research and development (R&D) expenditure is pivotal for fostering technological innovation and advancing technological progress. While much research has focused on the influence of boards of directors on corporate innovation, the role of foreign directors in shaping corporate R&D expenditure, particularly in developing countries, remains underexplored. Purpose: The aim of this paper is to investigate the pivotal role of foreign directors in corporate R&D expenditure within Chinese listed manufacturing firms. It also provides micro-level evidence of the economic consequences of foreign directors, considering heterogeneity across property rights, industry, regional dimensions, and board positions. Study design/methodology/approach: This study utilizes the largest and most detailed dataset of Chinese listed manufacturing firms in the CSMAR database, offering comprehensive proxy variables. The sample encompasses 18,273 observations from 2008 to 2021. Multivariate regression models, employing static two-way fixed effects models with clustered robust standard errors and dynamic generalized method of moment (GMM) models, were established to investigate the relationship between foreign directors and corporate R&D expenditure. Sensitivity tests involve the substitution of dependent and core explanatory variables. Moreover, heterogeneity test and situational analysis are conducted. Findings/conclusions: The results confirmed a significant augmentation in corporate R&D expenditure attributable to foreign directors. Heterogeneity analysis reveals that the positive impact of foreign directors on R&D expenditure is more pronounced in private-owned enterprises, high-tech industries, and economically developed regions of China. Situational analysis further confirms that foreign independent directors are the main driving force behind this effect. Limitations/future research: This research is confined to a single-country and single-industry sample, without a comprehensive consideration of the individual traits of foreign directors. Future research avenues could involve cross-national comparisons and a more nuanced categorization of foreign directors.

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“…Despite the numerous studies of the performance of RDI in business enterprises (Beld, 2014, Yigitcanlar et al, 2018, Kim et al, 2014, existing evidence are inconclusive to find specific ways for assess of development impact. Prior studies have explored the interrelationship between R&D investment, financial leverage, and a firm's R&D innovation success (O'Connell et al, 2022), or examition the drivers of university-firm R&D collaboration while at the same time assessing the determinants of innovation in the industry by analysing firm R&D collaborations with partners different from universities (Maietta, 2015) or comparing the impact of two policy instruments that may induce firms in developing countries to invest in R&D activities (Fernández-Sastre & Montalvo-Quizhpi, 2019) or investigates the mediating role of innovation performance in the effects of R&D intensity and R&D internationalization on firm performance (Leung & Sharma, 2021). Thus, a more approach that assess the impact of RDI on development of industry and their relation to economy is needed.…”

Section: Review Of Literaturementioning

confidence: 99%

Research, development and innovation in business enterprises: experience from Egypt

Khorshid¹,

Rezk²,

ISMAIL³

et al. 2023

IRD

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This paper addresses the linkages between research and development (R&D) and innovation on the one hand and the socioeconomic impact of research, development and innovation (RDI) on the other hand. More specifically, the paper suggests a two-stage methodology directed to analyse the performance of RDI in business enterprises and assess their development impact. A conceptual fourdimensional model and an integrated analytical framework were developed. This approach is complemented by the development of a statistical survey mainly designed to generate appropriate indicators for analysing the vital role of RDI in business enterprises. The survey results revealed several analytical points as well as specific imbalances of RDI system in business enterprises that need to be addressed by policymakers. Furthermore, the analytical results stress the need for Egyptian business enterprises to enhance and diversify their cooperation with other RDI-producing institutions to benefit from comparative advantages and improve the quality of RDI outputs.

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The Impact of R&D Innovation Success on the Relationship between R&D Investment and Financial Leverage

Cited by 9 publications

References 65 publications

Innovation’s Performance: A Transnational Analysis Based on the Global Innovation Index

Innovation’s Performance: A Transnational Analysis Based on the Global Innovation Index

Global minds, local impact: Exploring the effect of foreign directors on corporate R&D expenditure

Research, development and innovation in business enterprises: experience from Egypt

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