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Analyzing the Effect of R&D on Firm Resilience: Evidence from European Technology Firms

This paper investigates the effect of R&D intensity on firm resilience during the COVID-19 recession. I use firm-level data on European technology firms to identify the relation between R&D intensity and resilience, where firm resilience is measured through financial flexibility and firm performance. To investigate deeper into firm performance I distinguish between performance using accounting measures and market performance. I find that R&D intensity has a positive effect on resilience as viewed from accounting measures. I find mixed results regarding performance: No significant positive evidence between R&D intensity and stock performance is found, whereas evidence suggesting a significant non-linear relationship between R&D intensity and return on assets is found. Nevertheless, the results indicate that there seem to be some positive effect of R&D on firm resilience. This is of value to policymakers and corporate managers aiming to enhance firm resilience through strategic R&D investments. Further research with more detailed data are needed to explore the mechanisms behind this relationship.

Identiferoai:union.ndltd.org:UPSALLA1/oai:DiVA.org:uu-532711
Date January 2024
CreatorsLybæk, Vegard Ranum
PublisherUppsala universitet, Nationalekonomiska institutionen
Source SetsDiVA Archive at Upsalla University
LanguageEnglish
Detected LanguageEnglish
TypeStudent thesis, info:eu-repo/semantics/bachelorThesis, text
Formatapplication/pdf
Rightsinfo:eu-repo/semantics/openAccess

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