The Impact of Research and Development Investment on the Performance of Portuguese Companies

Ana Santos, Ana Bandeira and Patrícia Ramos ()
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Ana Santos: ISCAP, Polytechnic of Porto, 4465-004 Porto, Portugal
Ana Bandeira: CEOS.PP, ISCAP, Polytechnic of Porto, 4465-004 Porto, Portugal
Patrícia Ramos: CEOS.PP, ISCAP, Polytechnic of Porto, 4465-004 Porto, Portugal

Risks, 2024, vol. 12, issue 8, 1-13

Abstract: This study investigates the impact of Research and Development (R&D) investment on the performance of Portuguese companies, specifically addressing the gap in understanding how R&D influences a company’s value and performance. We employ a dynamic panel data model estimated using the Generalized Method of Moments (GMM) to account for potential endogeneity issues. This approach allows us to analyze the influence of R&D investment on the Return on Operating Assets (ROA) for Portuguese companies with significant R&D investments between 2012 and 2019. The analysis reveals that while R&D investment itself may not have a statistically significant short-term impact on ROA, lagged financial performance, leverage, asset turnover ratio, and accounts payable turnover all demonstrate a statistically significant relationship with the dependent variable.

Keywords: intangible assets; investment; R&D; financial performance; generalized method of moments (search for similar items in EconPapers)
JEL-codes: C G0 G1 G2 G3 K2 M2 M4 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jrisks:v:12:y:2024:i:8:p:126-:d:1451381

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