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Does Investment in R&D Affect Firm Reputation: Indian Experience

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  • Amanpreet Kaur
  • Balwinder Singh

Abstract

Reputation has been widely accepted as a surreptitious resource which is imperative for organisations to imbibe. Despite its recognition as a clandestine to success, its formation is arduous. It takes lot of effort on the part of corporate managers to identify and indulge into reputation-building activities. Several researchers have found that good corporate governance, socially responsible acts and financial performance lead to good reputation, but the role of research and development (R&D) activities in enhancing firm reputation has garnered less attention till date. The current study is novel as it examines the relevance of expenditure made on R&D activities in an emerging economy like India, where hardly any study has directly deciphered the relation between R&D activities and corporate reputation. The study analyses the impact of R&D activities undertaken by top 500 Indian companies on their reputation which is measured by market capitalisation. The results of multivariate regression analysis of cross-sectional data reveal that the amount spent on R&D activities can be viewed as an investment as it generates a significant positive impact on firm reputation. The findings suggest that stakeholders view R&D-intensive firms favourably.

Suggested Citation

  • Amanpreet Kaur & Balwinder Singh, 2019. "Does Investment in R&D Affect Firm Reputation: Indian Experience," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 5(2), pages 98-109, July.
    • Handle: RePEc:sae:jouent:v:5:y:2019:i:2:p:98-109
    DOI: 10.1177/2393957519841513
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    References listed on IDEAS

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