The Effect of R&D Input on Operating Income of Chinese Wastewater Treatment Companies—With Patent Performance as a Mediating Variable

Abstract

The Chinese government is actively promoting green and low-carbon transformation for economic and social development, especially in the wastewater treatment industry. This article uses regression analysis to study the impact of company R&D input on patent performance and company operating income for different regulatory environments and regions. Companies in the wastewater treatment industries of the Shanghai and Shenzhen stock exchanges from 2013 to 2020 are selected as research samples. The results show that there is a partial mediating effect of patent performance between company R&D input and company operating income; the stimulative effect of company R&D input is strongest in a high external-high internal environment; this stimulative effect is also more significant in the three strategic regions when compared with other regions. The findings suggest that company R&D input can promote company operating income. Thus, wastewater treatment enterprises should establish complete R&D systems to improve their innovative output capabilities. Enterprises in more developed regions should play a leading role in undertaking technological innovation. Furthermore, the government should formulate policies to improve the capacity of companies to conduct wastewater treatment and continue down the road of green development.

The Influence of Research and Development and Patent Activity on Business Performance: The Case of High-Technology Companies

“…Yun & Kim (2021) have come to the same conclusion regarding the effect of R&D investment on operating profit. Xu et al (2022) reached a similar conclusion when the influence of patent activity, as a moderator of the influence of R&D activities, on operating profit is in question. Lee et al (2015) found that internal R&D-generated and purchased patents have beneficial effects on profit.…”

“…The wastewater treatment companies were chosen for the research sample and the examined period is from 2013 to 2020. The findings indicate that the positive impact of R&D on operating income is moderated by patent activities (Xu et al, 2022).…”

“…The outcomes of the research also revealed a favourable moderating influence of a firm's ability to hold patents on the effect R&D innovation activities have on business management performance. Xu et al (2022) examined the effect of corporate R&D input on patent performance and company operating income using regression analysis. The wastewater treatment companies were chosen for the research sample and the examined period is from 2013 to 2020.…”

THE IMPACT OF R&D ACTIVITY ON THE BUSINESS PERFORMANCE OF HIGH-TECHNOLOGY COMPANIES

“…Caglar and Nisel (2017) state that marketing and R&D expenses in the manufacturing industry hurt Earnings before interest and tax (EBIT) and net earnings. Xu et al (2022) explored the effect of R&D input on the operating earnings of the wastewater companies listed on the Shanghai and Shenzen stock exchanges for the period from 2013 to 2020. The findings showed that R&D input has a positive and significant effect on company operating income.…”

Improving the Innovative Performance of Renewable Energy Enterprises in China: Effects of Subsidy Policy and Intellectual Property Legislation

“…Firstly, through examining the industrial policies of developed countries and regions such as the United States, Germany, and the European Union, it is clear that technological innovation is fundamental to renewable energy industrialization and that governments globally have spared no effort in supporting the research and development of renewable energy technologies [3,4]. In terms of renewable energy industry policies, all countries are basically the same, with policy being divided into three main areas: strengthening the protection of intellectual property rights, improving the investment environment, and establishing a renewable energy market, all of which are behind the booming development of the industry [5][6][7]. Secondly, in terms of research into government subsidies and innovative performance, most scholars believe that governments implement government subsidies to guide the flow of industrial resources and promote their optimal allocation [8][9][10][11].…”