University of Twente Student Theses
The impact of R&D investments on firm performance for European listed firms.
Reysoo, Gijs (2021) The impact of R&D investments on firm performance for European listed firms.
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| Abstract: | This paper investigates the impact of R&D investments on firm performance. There is still much ambiguity about this impact due to varying results among existing literature. Ordinary least squares (OLS) regression is applied to a sample of 472 European listed companies over the period 2011-2019. This revealed a clear inverted U-shaped relationship between R&D investment and firm performance. A nonlinear relationship, which indicates that it is profitable to invest in R&D up to approximately 1.60%. Additionally, it is also found that there is a negative relationship between R&D and high R&D firms (R&D intensity >1%) and a positive relationship between R&D and low R&D firms (RD intensity <1%). It is also observed that a larger firm size enhances firm performance while a highly leveraged company is strongly restricted in its R&D opportunities. |
| Item Type: | Essay (Master) |
| Faculty: | BMS: Behavioural, Management and Social Sciences |
| Subject: | 85 business administration, organizational science |
| Programme: | Business Administration MSc (60644) |
| Link to this item: | https://purl.utwente.nl/essays/87497 |
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