R&D productivity: an exploratory international study

Hervé Stolowy (), Michel Tenenhaus () and Yuan Ding
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Michel Tenenhaus: GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique

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Abstract: Design/methodology/approach – The research design is based on an earnings equationassociating earnings with recorded assets, R&D expenditures and selling, general and administrativeexpenses (proxying for advertising expenses). The paper determines a rate of return on R&D for eachgiven sample of firms in six developed countries.Findings – The results corroborate previous studies of American companies, which found thatreported earnings, adjusted for expensing of R&D, reflect realized benefits from R&D. This studyprovides further evidence on the positive contribution of R&D activities to future companyperformance, although this contribution can vary from one country to another.Research limitations/implications – Being exploratory in nature, this paper suggests severalareas for investigation.Originality/value – With the exception of some American studies, the economic effectiveness ofinvestment in R&D is seldom demonstrated explicitly by the literature, and to the best of ourknowledge, there are no existing studies on R&D productivity taking an international approach

Keywords: Company performance; Research and development; Investments (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (14)

Published in Review of Accounting and Finance, 2007, 6 (1), pp.86-101

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00170582

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