Corporate Governance vs. Financial Performance for Intensity of Innovation Investments

Raminta Benetyte, Halit Gonenc and Rytis Krusinskas
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Raminta Benetyte: Kaunas University of Technology, School of Economics and Business, 44249 Kaunas, Lithuania
Halit Gonenc: University of Groningen, Faculty of Economics and Business, 9712 CP Groningen, The Netherlands
Rytis Krusinskas: Kaunas University of Technology, School of Economics and Business, 44249 Kaunas, Lithuania

Sustainability, 2021, vol. 13, issue 9, 1-13

Abstract: In a rapidly changing technology world, companies need to conform to their customers’ expectations if they wish to remain competitive in the marketplace. New products, services, processes, marketing, management, and organizational innovation can all be tools to keep companies competitive. Research and development (R&D) expenditure is a critical component in the development of a design process. According to the scientific literature, corporate governance and financial performance can be essential variables with a significant impact on the innovation process. By acting transparently and honestly with all stakeholders (employees, suppliers, customers, creditors, government, community), companies can ensure and enhance the economic sustainability of the whole country through efficient management of financial resources and work toward high value-added innovation. Therefore, the aim of this work was to analyze whether corporate governance and financial performance affect the development of corporate innovation investments and, at the same time, the sustainability of the country’s economy. Additionally, this research proposes a methodology for integrated assessment of corporate innovation investments in the context of economic sustainability, aimed at companies and countries for more efficient investment in innovation and sustainable development outcomes. The object of the research was corporate innovation investment intensity as the driver for economic sustainability. An evaluation methodology for integrated assessment of corporate innovation investment can be used as an instrument for the stimulation of business innovation and strategic development of a country’s economy. The evaluation methodology of integrated assessment of corporate innovation investments can be utilized to evaluate different companies and governments. Evidence-based empirical calculations show that synchronized corporate governance and financial performance influence the intensity of corporate innovation investments in the context of economic sustainability.

Keywords: corporate governance; corporate financial performance; country economic sustainability; corporate innovation investment intensity; research and development expenditure (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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