IDEAS home Printed from https://ideas.repec.org/a/gam/jrisks/v12y2024i8p126-d1451381.html
   My bibliography  Save this article

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

Author

Listed:
  • 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
    INESC TEC, 4200-465 Porto, Portugal)

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.

Suggested Citation

  • Ana Santos & Ana Bandeira & Patrícia Ramos, 2024. "The Impact of Research and Development Investment on the Performance of Portuguese Companies," Risks, MDPI, vol. 12(8), pages 1-13, August.
    • Handle: RePEc:gam:jrisks:v:12:y:2024:i:8:p:126-:d:1451381
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-9091/12/8/126/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-9091/12/8/126/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Freimane Rita & Bāliņa Signe, 2016. "Research and Development Expenditures and Economic Growth in the EU: A Panel Data Analysis," Economics and Business, Sciendo, vol. 29(1), pages 5-11, August.
    2. Barth, Mary E. & Kasznik, Ron, 1999. "Share repurchases and intangible assets," Journal of Accounting and Economics, Elsevier, vol. 28(2), pages 211-241, December.
    3. Ana Maria Bandeira & Óscar Afonso, 2010. "Value of intangibles arising from R&D activities," FEP Working Papers 372, Universidade do Porto, Faculdade de Economia do Porto.
    4. Ehie, Ike C. & Olibe, Kingsley, 2010. "The effect of R&D investment on firm value: An examination of US manufacturing and service industries," International Journal of Production Economics, Elsevier, vol. 128(1), pages 127-135, November.
    5. Rodrigues, Ricardo & Samagaio, António & Felício, Teresa, 2020. "Corporate governance and R&D investment by European listed companies," Journal of Business Research, Elsevier, vol. 115(C), pages 289-295.
    6. Bae, Sung C. & Noh, Seungwook, 2001. "Multinational corporations versus domestic corporations: a comparative study of R&D investment activities," Journal of Multinational Financial Management, Elsevier, vol. 11(1), pages 89-104, February.
    7. Gelb, David S & Siegel, Philip, 2000. "Intangible Assets and Corporate Signaling," Review of Quantitative Finance and Accounting, Springer, vol. 15(4), pages 307-323, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fan Ren, 2024. "Does Government Environmental Concern Affect Enterprise Sustainable Development? Evidence from China," Sustainability, MDPI, vol. 16(21), pages 1-21, November.
    2. Jaehong Lee & Young Soo Yang, 2019. "International Strategy, R&D Intensity, and Sustainable Earnings of Biotech Firms," Sustainability, MDPI, vol. 11(17), pages 1-17, September.
    3. Dejan Ravšelj & Aleksander Aristovnik, 2020. "The Impact of R&D Expenditures on Corporate Performance: Evidence from Slovenian and World R&D Companies," Sustainability, MDPI, vol. 12(5), pages 1-20, March.
    4. Joanna Golden, 2018. "The Effect of Shareholder Rights and Information Asymmetry on Stock-Option-Related Repurchase Activity," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 21(02), pages 1-41, June.
    5. Mark Mietzner, 2017. "Why do firms decide to stop their share repurchase programs?," Review of Managerial Science, Springer, vol. 11(4), pages 815-855, October.
    6. Alam, Ashraful & Uddin, Moshfique & Yazdifar, Hassan & Shafique, Sujana & Lartey, Theophilus, 2020. "R&D investment, firm performance and moderating role of system and safeguard: Evidence from emerging markets," Journal of Business Research, Elsevier, vol. 106(C), pages 94-105.
    7. Cho, Jaemin & Lee, Jaeho, 2013. "The venture capital certification role in R&D: Evidence from IPO underpricing in Korea," Pacific-Basin Finance Journal, Elsevier, vol. 23(C), pages 83-108.
    8. Ryan D. Leece & Todd P. White, 2017. "The effects of firms’ information environment on analysts’ herding behavior," Review of Quantitative Finance and Accounting, Springer, vol. 48(2), pages 503-525, February.
    9. Nguyen, Minh Hong & Trinh, Vu Quang, 2023. "U.K. economic policy uncertainty and innovation activities: A firm-level analysis," Journal of Economics and Business, Elsevier, vol. 123(C).
    10. Woo Sung Kim & Kunsu Park & Sang Hoon Lee & Hongyoung Kim, 2018. "R&D Investments and Firm Value: Evidence from China," Sustainability, MDPI, vol. 10(11), pages 1-17, November.
    11. Chen-Lung Chin & Picheng Lee & Gary Kleinman & Pei-Yu Chen, 2006. "IPO anomalies and innovation capital," Review of Quantitative Finance and Accounting, Springer, vol. 27(1), pages 67-91, August.
    12. Başak Dalgıç & Burcu Fazlıoğlu, 2021. "Innovation and firm growth: Turkish manufacturing and services SMEs," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(3), pages 395-419, September.
    13. Lee, Chien-Chiang & Wang, Chih-Wei & Liu, Fengyun, 2024. "Does green credit promote the performance of new energy companies and how? The role of R&D investment and financial development," Renewable Energy, Elsevier, vol. 235(C).
    14. Zhaoyang Guo & Siyu Hou & Qingchang Li, 2020. "Corporate Social Responsibility and Firm Value: The Moderating Effects of Financial Flexibility and R&D Investment," Sustainability, MDPI, vol. 12(20), pages 1-17, October.
    15. Michael Firth & T. Y. Leung & Oliver M. Rui, 2011. "Insider Trading in Hong Kong: Tests of Stock Returns and Trading Frequency," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 14(03), pages 505-533.
    16. Dwi Ratmono & Darsono Darsono & Selviana Selviana, 2021. "Effect of Carbon Performance, Company Characteristics and Environmental Performance on Carbon Emission Disclosure: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 101-109.
    17. Ramadani, Veland & Hisrich, Robert D. & Abazi-Alili, Hyrije & Dana, Léo-Paul & Panthi, Laxman & Abazi-Bexheti, Lejla, 2019. "Product innovation and firm performance in transition economies: A multi-stage estimation approach," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 271-280.
    18. Xue-Zhou Zhao & Jun Chen & Feng-Wen Chen & Wei Wang & Senmao Xia, 2020. "How High-Polluting Firms Suffer from Being Distracted form Intended Purpose: A Corporate Social Responsibility Perspective," IJERPH, MDPI, vol. 17(24), pages 1-29, December.
    19. Larry Fauver & Gilberto Loureiro, 2015. "Equity Offerings, Stock Price Crash Risk, and the Impact of Securities Regulation: International Evidence," NIPE Working Papers 14/2015, NIPE - Universidade do Minho.
    20. Suh, Yongyoon & Kim, Moon-Soo, 2014. "Internationally leading SMEs vs. internationalized SMEs: Evidence of success factors from South Korea," International Business Review, Elsevier, vol. 23(1), pages 115-129.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jrisks:v:12:y:2024:i:8:p:126-:d:1451381. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.