R&D Intensity and Its Curvilinear Relationship with Firm Profitability: Perspective from the Alternative Energy Sector

Sustainability

Natasha Hazarika¹ 

[1] Department of Humanities and Social Sciences, Indian Institute of Technology Guwahati, Assam 781039, India;

关键词: corporate financial performance;    alternative energy;    innovation;    R&;    D intensity;   

DOI  :  10.3390/su13095060

来源: DOAJ

【 摘 要 】

There is an inconclusive debate concerning the relationship between environmental research and development (R&D) and corporate financial performance (CFP). The debate becomes more complex because a win–win situation between environmental and financial goals is not as plausible in practice as it is in theory. Though arguments have been made that when time-lag is considered, the relationship can produce positive outcomes for both entities, ambiguities persist because linear models dominate this analysis. This study, therefore, empirically tested the existence of a curvilinear relationship between R&D intensity and CFP in the context of the alternative energy sector. Using a panel dataset of 24 companies and 232 unbalanced firm-year observations for 10 years, it was found that after passing the inflection points, investment in R&D reaps financial benefits that will eventually offset the cost of the initial investment. The curvilinear relationship of R&D intensity on return on sales and net profit margin is strongly supported.

【 授权许可】

Unknown