Title: Research and development investment and firm performance: a developing country perspective
Authors: Hamza Akorede
Addresses: Doctoral School of Management, Higher School of Economics, Saint Petersburg, Russia
Abstract: Research and development is a vital source of knowledge generation for innovative companies. Such companies can exploit this knowledge to create new products and services to achieve superior performance. However, R&D requires a significant amount of investment; moreover, it is an uncertain investment. This paper aims to examine the relationship between investment in R&D and firm performance using a fixed-effect method. The findings show a significant positive relationship. In addition, by using a one-year lag of R&D, the results show an insignificant relationship. These findings suggest that the selected companies have benefited from their investment in R&D but are inadequately investing in this activity. The paper further discusses the implication of the findings for managers and policymakers.
Keywords: R&D investment; research and development; firm performance; sales; operating profit; knowledge; fixed effect; developing country; low-and-middle-income; Nigeria.
International Journal of Technological Learning, Innovation and Development, 2021 Vol.13 No.4, pp.305 - 317
Received: 08 Jan 2021
Accepted: 15 Jun 2021
Published online: 14 Feb 2022 *