Implications of Research and Development on Business Performance: Evidence from Firm’s Survey in Uttar Pradesh, India

Tabassum Ali ., Aftab Alam ., Meraj Salim .

Abstract


The key objective of this study is to analyse the implications of research and development on the performance of business sector in Uttar Pradesh, India, based a comprehensive survey of 525 firms operating in the state and conducted under the World Bank’s Enterprise Survey, 2014. The survey contained information on a variety of enterprise characteristics such as location, size of firms, type of firms, age and gender of ownership and business performance indicators such as cost of production, employment generation and output. To understand the difference in business performance, the surveyed business firms have been categorized into two groups (i) firms with formal research and development expenditure and (ii) firms without formal research and development expenditure. Simple statistical tools such as descriptive statistics and t-test have been used to analyse the data using Statistical Package for the Social Sciences (SPSS) version 20.0. Empirical evidences clearly indicate that there has been positive relationship between firm’s performance and research and development investment across industries and countries. Out of the total 525 firms surveyed under the World Bank’s Enterprise Survey, about 40 percent have reported investment in formal research and development and collaboration with academic institutions. Results of chi-square and t-test indicate a significant difference in business performance across R&D firms versus non-R&D firms. This study provides insight in designing policies for promoting research and development activities and their implications in business enterprises in a focused manner.


Keywords


business performance, research and development, comprehension survey

Full Text:

PDF

References


Aiello, F., & Cardamone, P. (2008). R&D spillovers and firms’ performance in Italy. Empirical Economics, 34(1), 143–166.

Arvanitis, S. (2012). How do different motives for R&D cooperation affect firm performance? An analysis based on Swiss micro data. Journal of Evolutionary Economics, 22(5), 981–1007.

Belderbos, R., Carree, M., & Lokshin, B. (2004). Cooperative R&D and firm performance. Research Policy, 33(10), 1477–1492.

Eng, L. L., & Shackell, M. (2001). The Implications of Long-Term Performance Plans and Institutional Ownership for Firms’ Research and Development Investments. Journal of Accounting, Auditing & Finance, 16(2), 117–139.

Falk, M. (2012). Quantile estimates of the impact of R&D intensity on firm performance. Small Business Economics, 39(1), 19–37.

Fortune, A., & Shelton, L. (2012). R&D Effort, Effectiveness, and Firm Performance in the Pharmaceutical Sector. Journal of Business & Management, 18(1), 97–115.

Froehlich, J. K., Hoegl, M., & Weiss, M. (2015). Thematic Thinking and Individual Performance in Research and Development. Journal of Product Innovation Management, 32(6), 939–953.

Garca-Manjn, J. V., & Romero-Merino, M. E. (2012). Research, development, and firm growth. Empirical evidence from European top R&D spending firms. Research Policy, 41(6), 1084–1092.

Krasnikov, A., & Jayachandran, S. (2008). The Relative Impact of Marketing, Research-and-Development, and Operations Capabilities on Firm Performance. Journal of Marketing, 72(July), 1–11.

Le, S. A., Walters, B., & Kroll, M. (2006). The moderating effects of external monitors on the relationship between R&D spending and firm performance. Journal of Business Research, 59(2), 278–287.

Lu, Y., & Karpova, E. (2012). An Investigation of Chinese Textile Firms’ R&D Performance. Clothing and Textiles Research Journal, 30(3), 217–231.

Ming-Liang, Y., Hsiao-Ping, C., Sherc, P. J., & Yi-Chia, C. (2010). R&D intensity, firm performance and the identification of the threshold: fresh evidence from the panel threshold regression model. Applied Economics, 42(3), 389–401.

Peterson, R. A., & Jeong, J. (2010). Exploring the impact of advertising and R&D expenditures on corporate brand value and firm-level financial performance. Journal of the Academy of Marketing Science, 38(6), 677–690.

Sharma, C. (2012). R&D and firm performance: evidence from the Indian pharmaceutical industry. Journal of Asia Pacific Economy, 17(2), 332–342.

Sheng-Syan, C., Yan-Shing, C., Woan-lih, L., & Yanzhi, W. (2013). R&D Spillover Effects and Firm Performance Following R&D Increases. Journal of Financial & Quantitative Analysis, 48(5), 1607–1634.

Swift, T. (2013). R&D expenditure volatility and firm performance: organizational and environmental contexts. International Journal of Innovation and Technology Management, 10(04), 1350013.

Vithessonthi, C., & Racela, O. C. (2016). Short- and long-run effects of internationalization and R&D intensity on firm performance. Journal of Multinational Financial Management, 34, 28–45.

Warusawitharana, M. (2015). Research and development, profits, and firm value: A structural estimation. Quantitative Economics, 6(2), 531–565.


Refbacks

  • There are currently no refbacks.




Editorial Office:

Educational Research Multimedia & Publications,
S.N. 21, Plot No 24, Mirza Ghalib Road Malegaon Nasik,
Maharashtra India - 423203.
+919764558895 (whatsapp),
editor@scholarshub.net, www.scholarshub.net

Copyrights © 2010-2020 - ERM Publications, India     

This work is licensed under https://creativecommons.org/licenses/by-sa/4.0/