2014
EMSS 2014 Proceeding
The relationship between R&D expenses and performance: evidence from European manufacturing enterprises
Authors: Ondrej Zizlavsky, Michal Karas
Abstract
Measuring performance and contribution of R&D to performance has become a critical concern for managers and executives. This paper illustrates a link between R&D expenses and performance through a statistical model. We test whether and how innovation influences performance. Therefore, we consider R&D expenses (the independent variable) and other financial indicators of the enterprise?s performance (the dependent variables). Enterprises from manufacturing industries have been chosen as an examined sample. The data was obtained from the Amadeus database in the period 2007 to 2012. From a managerial point of view, such a model should be useful in predicting how enterprises may invest in new R&D capabilities in the future. We found significant relationship between the return on assets and past R&D expenses. The main limitation of our analysis is, that data provide only a view into medium and large-sized companies due to focus on top R&D investing companies in the EU.
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