The Role of R&D Expenses for Profitability: Evidence from U.S. Fossil and Renewable Energy Firms

Abstract

This study investigates the relationship between R&D expenses and profitability for a panel of U.S. firms in the energy sector. The analysis, spanning the period 1990-2011, differentiates the energy sector into two groups: firms that sell fossil energy sources to generate electricity and firms that sell renewable energy sources to generate electricity. The empirical findings show that R&D expenses have a stronger impact on profitability in the group of firms that sell renewable energy sources.

The Impact of R&D Expenditures on Corporate Performance: Evidence from Slovenian and World R&D Companies

“…Some empirical studies establish that R&D expenditures have an immediate beneficial impact on current operating performance. This is confirmed by several empirical studies for companies operating in the USA [18,19]. Similar evidence can be found also for companies operating in the global electronics industry, the study reveals a positive relationship between R&D expenditures and gross profit, although it shows that R&D expenditures do not enhance return on equity (ROE) and return on assets (ROA) [20].…”

İnovasyon ve Kârlılık Arasındaki İlişki: Otomotiv Sektörü Üzerine Bir Araştırma

“…Zhu and Huang (2012), Apergis and Sorros (2014), Kocamış and Güngör (2014), hazelnut and January (2016), Doğan and Yıldız (2016), Yıldırım and Sakarya (2017), Özer et al (2019Özer et al ( ), Taysi (2020 and Sevim (2021) used the values of active profitability ratio (ROA) and equity profitability ratio (ROE) as indicators of financial performance of an enterprise in their studies. Also, Zhu and Huang (2012), Apergis and Sorros (2014), Dagli and Ergün (2017), Demir and Güleç (2018), Özer et al (2019), Güzen and Başar (2019) were considered the R & D expense. The aim of this study is to investigate the impact of innovation on financial performance in businesses operating in the automotive manufacturing sector.…”

Relative efficiency of R&D in European countries

“…In order to achieve competitive advantage, efficiency and productivity of R&D operation is acquired (Werner and Souder, 1997). Although some empirical studies argue that expenditures on R&D have an immediate positive impact on current operating performance (Apergis and Sorros, 2014), while other studies argue that benefits can be visible in the long run (Gumus and Celikay, 2015;Ravšelj and Aristovnik, 2020), general opinion is that expenditures on R&D positively affect modern businesses and economic growth. One of the most important components of economic growth is technological development and therefore efficiency of R&D operations is crucial for companies, institutions and countries to be competitive A.…”