engleski

Impact of Research and Development Expenditure on Firm Performance

In today’s competitive surroundings, firms’ research and development activities and investments in knowledge and innovation have become one of the most important factors that may affect their profitability and sustainability, hence, the aim of this research is to investigate the influence of research and development (R&D) expenditure on the performance of the largest companies that operated in Croatian manufacturing industry in 2018. The analysis is performed with the multiple regression analysis. Corporate performance, as a dependent variable, is measured using two accounting-based performance measures, return on assets (ROA) and net profit margin (NPM), while independent variables, besides R&D, encompass firm-specific variables including size of the firm, firm’s age and liquidity. The results of the conducted analysis revealed that depending on the used regressand variable, the R&D expenditure may positively as well as negatively influence firms’ performance, however this influence is not found to be statistically significant in neither of the performed regression analyses. The influence of firm’s size, age and liquidity is found to be positive and statistically significant.

R&D expenditure, manufacturing industry, Croatia

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