Analysis of the Relationship Between R&D and Company Performance

Nadine Weber, Mohit Srivastava and Ladislav Tyll
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Nadine Weber: VSE - Prague University of Economics and Business
Mohit Srivastava: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School
Ladislav Tyll: VSE - Prague University of Economics and Business

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Abstract: Research and development (R&D) activities are crucial to remain competitive. Extant literature presents divergent views on R&D's contribution to company performance, specifically profitability. It hints at cultural differences in approaching R&D. This leads to analyzing such relationships within a regional comparison. Filling the research gap by focusing on the Technology, Media and Telecommunication (TMT) sector, this study evaluated a sample of 132 Asian and European companies operating in the TMT sector for 2018 – 2022. Using the panel generalized method of moments, results showed that R&D intensity had an insignificant impact on profitability but a positive and significant effect on capital market performance. Furthermore, Asian firms' R&D intensity had a more pronounced influence on performance, supporting the literature's view on cultural differences in R&D strategies.

Keywords: Capital market performance; Panel generalized methods of moments; Profitability; Research and development; TMT sector (search for similar items in EconPapers)
Date: 2024-10-17
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Published in Journal of East-West Business, 2024, pp.1-36. ⟨10.1080/10669868.2024.2415022⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04982227

DOI: 10.1080/10669868.2024.2415022

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