The Impact of Lagged R&D Expenses on Firm Performance: Empirical Evidence from the BSE Healthcare Index
The study finds the impact of lagged Research and Development expenditure on financial performance. The investigation analyses 69 pharmaceutical companies included in the BSE healthcare index (India) using secondary data for the period of 2008 to 2017. The two dependent variables which are consid...
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| Format: | Article |
| Language: | English |
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Faculty of Management & Finance, University of Colombo
2020-12-01
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| Series: | Colombo Business Journal |
| Subjects: | |
| Online Access: | https://mgmt.cmb.ac.lk/cbj/wp-content/uploads/2020/12/5.-RD-expenses-Performance.pdf |
| _version_ | 1811194055962394624 |
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| author | Abhijit Sinha |
| author_facet | Abhijit Sinha |
| author_sort | Abhijit Sinha |
| collection | DOAJ |
| description | The study finds the impact of lagged Research and Development expenditure on financial
performance. The investigation analyses 69 pharmaceutical companies included in the BSE
healthcare index (India) using secondary data for the period of 2008 to 2017. The two
dependent variables which are considered separately are Return on Asset (ROA) and Return
on Equity (ROE). The two estimated regression models show that both the lagged value and
its quadratic term have a significant influence on the accounting-based measures. With regard
to the control variables, size and leverage are found to influence negatively whereas liquidity
poses a positive effect on these two accounting-based performance measures. The article
contributes by highlighting that the true relationship between R&D and financial performance
is represented by a U-shaped curve as evident in few other studies. |
| first_indexed | 2024-04-12T00:19:28Z |
| format | Article |
| id | doaj.art-c257140f29664521a1c33134092629eb |
| institution | Directory Open Access Journal |
| issn | 1800-363X 2579-2210 |
| language | English |
| last_indexed | 2024-04-12T00:19:28Z |
| publishDate | 2020-12-01 |
| publisher | Faculty of Management & Finance, University of Colombo |
| record_format | Article |
| series | Colombo Business Journal |
| spelling | doaj.art-c257140f29664521a1c33134092629eb2022-12-22T03:55:45ZengFaculty of Management & Finance, University of ColomboColombo Business Journal1800-363X2579-22102020-12-01110211414110.4038/cbj.v11i2.66The Impact of Lagged R&D Expenses on Firm Performance: Empirical Evidence from the BSE Healthcare IndexAbhijit Sinha0https://orcid.org/0000-0003-3034-0930Department of Commerce, Vidyasagar University, IndiaThe study finds the impact of lagged Research and Development expenditure on financial performance. The investigation analyses 69 pharmaceutical companies included in the BSE healthcare index (India) using secondary data for the period of 2008 to 2017. The two dependent variables which are considered separately are Return on Asset (ROA) and Return on Equity (ROE). The two estimated regression models show that both the lagged value and its quadratic term have a significant influence on the accounting-based measures. With regard to the control variables, size and leverage are found to influence negatively whereas liquidity poses a positive effect on these two accounting-based performance measures. The article contributes by highlighting that the true relationship between R&D and financial performance is represented by a U-shaped curve as evident in few other studies.https://mgmt.cmb.ac.lk/cbj/wp-content/uploads/2020/12/5.-RD-expenses-Performance.pdflagged r&dfirm performanceroaroebse healthcare index |
| spellingShingle | Abhijit Sinha The Impact of Lagged R&D Expenses on Firm Performance: Empirical Evidence from the BSE Healthcare Index Colombo Business Journal lagged r&d firm performance roa roe bse healthcare index |
| title | The Impact of Lagged R&D Expenses on Firm Performance: Empirical Evidence from the BSE Healthcare Index |
| title_full | The Impact of Lagged R&D Expenses on Firm Performance: Empirical Evidence from the BSE Healthcare Index |
| title_fullStr | The Impact of Lagged R&D Expenses on Firm Performance: Empirical Evidence from the BSE Healthcare Index |
| title_full_unstemmed | The Impact of Lagged R&D Expenses on Firm Performance: Empirical Evidence from the BSE Healthcare Index |
| title_short | The Impact of Lagged R&D Expenses on Firm Performance: Empirical Evidence from the BSE Healthcare Index |
| title_sort | impact of lagged r d expenses on firm performance empirical evidence from the bse healthcare index |
| topic | lagged r&d firm performance roa roe bse healthcare index |
| url | https://mgmt.cmb.ac.lk/cbj/wp-content/uploads/2020/12/5.-RD-expenses-Performance.pdf |
| work_keys_str_mv | AT abhijitsinha theimpactoflaggedrdexpensesonfirmperformanceempiricalevidencefromthebsehealthcareindex AT abhijitsinha impactoflaggedrdexpensesonfirmperformanceempiricalevidencefromthebsehealthcareindex |