Firm size, R&amp;D expenditure, and international orientation: an empirical analysis of performance of Indian firms

Sinha, Abhishek Kumar; Mishra, Aswini Kumar; Patel, Yash

doi:10.1504/ijtlid.2019.106604

Cited by 10 publications

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“…They stated that R&D expenditure is a crucial risk factor in determining equity returns. Other studies and statistical analyses of R&D spending in similar cases in other emerging economies, such as Turkey (BaŞgoze & Sayin, 2013), China (Lu, 2020;Opoku-Mensah, Yin, & Addai, 2021;Su et al, 2021), India (Majumdar, 2011;Sinha, Mishra, & Patel, 2019;Sharma & Srikanth 2021), and Pakistan (Ghaffar & Khan, 2014), have found an essential linked between R&D expenditure, firm value, and stock returns. Furthermore, the majority of previous studies on R&D return premium at the firm-and industry-level primarily focussed on high R&D economies such as the United States (Callimaci & Landry, 2004;Ehie & Olibe, 2010;Moncada-Paternò-Castello et al, 2010;Dongmei, 2011;Yu et al, 2020), South Korea (Kim & Park, 2020), Brazil (Silva, Klotzle, Pinto, & da Motta, 2018), China (Lu, 2020;Xu, Geng, Wei, & Jiang, 2020;Su et al, 2021), Israel, Finland and Korea (Yury, Albert, & Ilia, 2017).…”

Section: Randd Investment and Firm Factor Characteristicsmentioning

confidence: 95%

EVALUATING R&D PREMIUM IN THE INDIAN HEALTH AND PHARMACEUTICALS INDUSTRIES

Sharma

Pyati²

2022

jmk

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The economic advantages of research and development (R&D) investment have shown conflicting results in empirical studies. This study aimed to examine a different approach, evaluating R&D premium and cross-sectional variability of equity returns, a particular case for the Indian healthcare industry. The primary motivation for this study arrived from the size of the healthcare industry, the world's third-largest and India's largest industry, and the investment made in R&D activities. Results demonstrated that India's annualized R&D premium was significantly greater than the current value, investment, profitability, and momentum premiums. It indicated that the new R&D risk factor in pricing models is a primary reference for Indian equity investors, particularly for companies with R&D spending. Results were robust in evaluating portfolio return using univariate and multivariate tests. Findings suggested that R&D augmented models outperformed conventional pricing models, denoting that the R&D factor undoubtedly revealed priced element and vital risk factor in designing pricing models for emerging countries like India. When adjusting to R&D investment and trading strategies, policymakers, and financial professionals should hereby evaluate their risk-return implications

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Section: Randd Investment and Firm Factor Characteristicsmentioning

confidence: 95%

EVALUATING R&D PREMIUM IN THE INDIAN HEALTH AND PHARMACEUTICALS INDUSTRIES

Sharma

Pyati²

2022

jmk

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“…R&D Intensity -R&D activities exhibit an important role in enhancing the performance of SMEs through an increase in productivity and growth of firms (Battaglia et al, 2018;Booltink and Saka-Helmhout, 2018;Colclough et al, 2019;Kim and Park, 2010). The relationship between R&D and firm performance has also been found to be positive in several empirical studies (Bhaskaran, 2006;Hsueh et al, 2013;Sinha et al, 2019). Manufacturing SMEs with a high R&D investment not only manage to improve their processes and products but also develop spill-over abilities ranging from greater absorptive capacity to stronger capability in responding to the opportunities and threats they may face.…”

Section: Methodology 221 Dependent Variablesmentioning

confidence: 99%

“…Firm Age -The effect of age on firm performance has been studied in several contexts (Coad et al, 2013(Coad et al, , 2016LiPuma et al, 2013;Sinha et al, 2019;Withers et al, 2011), but the results are inconclusive in this regard (Coad, 2018). Age is treated as an explanatory variable for firm performance due to the concept of liability of newness (Bakker and Josefy, 2018;Hughes et al, 2021;Rabbiosi and Santangelo, 2013).…”

Section: Methodology 221 Dependent Variablesmentioning

confidence: 99%

“…We analyse this argument by examining the relationship between R&D intensity and performance, also noting differences between small-scale enterprises (SEs) and medium-scale (ME) firms, based on the argument in literature on the linear association between R&D investment and firm size (Sinha et al , 2019). Also, we intend to examine the influence of technological sectors in these relationships.…”

Section: Introductionmentioning

confidence: 99%

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Examining the determinants of small firms' performance in India

Sinha

Mishra

et al. 2021

IJPPM

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PurposeThe objective of the study is to analyse the impact of research and development investment on the firm performance of “small” scale firms vis-a-vis “medium”-scale firms.Design/methodology/approachThe dataset comprised of a balanced panel of 486 research and development conducting Indian manufacturing small and medium enterprises, constructed for the period of 2006–2017. Fixed Effects, Random Effects Model and Hausmann test were used to analyse the determinants of firm performance in manufacturing small and medium enterprises in India.FindingsIt was found that from firms’ research and development (R&D) investments in terms of performance could be attained if simultaneously internationalisation and higher capital intensity could be achieved.Practical implicationsManagers could pay specific attention to the antecedents of firm performance and calibrate their R&D investment, internationalisation efforts and capital intensity simultaneously to achieve higher growth and productivity. For policymakers, the results provide an insight into how the firms in both categories could be differently incentivised, such that resources are better utilised.Originality/valueThe study analysed the determinants of firm performance in small and medium-sized firms at a disaggregate level as well as at a sectoral level using fixed effects, random effects and lagged effects to arrive at novel results, which have important implications for their competitiveness.

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“…Specifically, scholars have examined how increased foreign direct investment (FDI), entry of multi-national enterprises (MNEs) and liberalised industry, trade and patent policies have impacted innovation (Das, 2004; Kathuria, 2008; Dubey and Dubey, 2010; Krishna et al , 2012). However, the literature on the impact of firm-level innovation on firm performance in the Indian context at the macro level is very limited (Sinha et al , 2019, 2021). Against this backdrop, the most important objective of this paper is to provide a rich description of the nature of firm-level innovation and investments in India.…”

Section: Review Of Literaturementioning

confidence: 99%

Exploring firm-level innovation and productivity in India

Mishra

Sinha

Khasnis

et al. 2021

IJIS

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Purpose This paper aims to analyse the impact of innovation on the productivity of firms in India using the data from the World Enterprise Survey. This paper first classifies three different types of innovation measures then further analyses their relation with the productivity of the firms. Design/methodology/approach The methodology used for this study has incorporated the structural Crépon-Douget-Mairesse (CDM) model wherein productivity is measured using both the innovation inputs and the innovation outputs. Three main equations have been used to quantify this relation includes the knowledge intensity function, innovation function and the productivity equation. Findings Findings indicate that decision to invest in research and development (R&D) is influenced negatively by financial obstacles and trade obstacles and positively influenced by telecommunication obstacles, government obstacles and the size of the firm in India. Similarly, financial obstacles and the size of the firm are affecting the firm’s research expenditure per employee. Also, financial obstacles seem to hinder the research intensity and larger firms seem to have higher research intensity. The size of the firm contributes significantly to product innovation. However, R&D spending seems to be negatively related to the innovation outcome. The findings relating to productivity shows neither product nor process innovation outputs, independently are not contributing significantly to the productivity of firms. However, product and process innovation, together serve as innovation outputs is a significant contributor to firm productivity. On the other hand, organisational innovation contributes significantly to the productivity of the firms in a negative manner. Originality/value The findings relating to productivity shows neither product nor process innovation outputs, independently are not contributing significantly to the productivity of firms (which has been measured by sales per worker is impacted by the capital and the labour inputs). However, product and process innovation, together serve as innovation outputs is a significant contributor to firm productivity. On the other hand, organisational innovation contributes significantly to the productivity of the firms in a negative manner. The reason could be due to the fact that the definition of organisational innovation incorporates both dissolutions and mergers.

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Firm size, R&D expenditure, and international orientation: an empirical analysis of performance of Indian firms

Cited by 10 publications

References 0 publications

EVALUATING R&D PREMIUM IN THE INDIAN HEALTH AND PHARMACEUTICALS INDUSTRIES

EVALUATING R&D PREMIUM IN THE INDIAN HEALTH AND PHARMACEUTICALS INDUSTRIES

Examining the determinants of small firms' performance in India

Exploring firm-level innovation and productivity in India

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