Exploring R&D Influences on Financial Performance for Business Sustainability Considering Dual Profitability Objectives

Kao-Yi Shen, Min-Ren Yan and Gwo-Hshiung Tzeng
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Kao-Yi Shen: Department of Banking & Finance, Chinese Culture University (SCE), Taipei 11114, Taiwan
Min-Ren Yan: Institute of International Business Admin., Chinese Culture University (SCE), Taipei 11114, Taiwan
Gwo-Hshiung Tzeng: Graduate Institute of Urban Planning, National Taipei University, New Taipei City 23741, Taiwan

Sustainability, 2017, vol. 9, issue 11, 1-21

Abstract: The importance of research and development (R&D) for business sustainability have gained increasing interests, especially in the high-tech sector. However, the efforts of R&D might cause complex and mixed impacts on the financial results considering the associated expenses. Thus, this study aims to examine how R&D efforts may influence business to improve its financial performance considering the dual objectives: the gross and the net profitability. This research integrates a rough-set-based soft computing technique and multiple criteria decision-making (MCDM) methods to explore this complex and yet valuable issue. A group of public listed companies from Taiwan, all in the semiconductor sector, is analyzed as a case study. More than 30 variables are considered, and the adopted soft computing technique retrieves 14 core attributes—for the dual profitability objectives—to form the evaluation model. The importance of R&D for pursuing superior financial prospects is confirmed, and the empirical case demonstrates how to guide an individual company to plan for improvements to achieve its long-term sustainability by this hybrid approach.

Keywords: business sustainability; research and development (R&D); multiple criteria decision-making (MCDM); financial objective; variable-consistency dominance-based rough set approach (VC-DRSA); internetwork relationship map (INRM); directional flow graph (DFG) (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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