The Impact Of R&D Investment On Firm Performance

The environmental protection industry is the backbone of the battle for ecological civilization construction and pollution prevention and control.Our country is in the transitional stage of green development,and the environmental protection industry is developing rapidly under the impetus of environmental protection policies.Environmental protection is a technology-intensive field.The development of the industry requires continuous technological innovation as support.Technological innovation is the source of improving core competitiveness and promoting economic growth.R&D investment is a prerequisite for innovation capabilities.Effective R&D investment will promote the improvement of firm performance.This paper selects 179 environmental protection companies listed on the New OTC Market from 2016 to 2019 as the research objects.The research data sources are WIND database and audited company annual reports.SPSS26.0 software,SPSSAU software and EXCEL2016 are used for descriptive analysis,sexual analysis,and regression analysis of the related data.The explanatory variable in the constructed fixed-effects model is R&D expenditure input intensity,and the by explanatory variable is firm performance.Firm performance is quantified in two dimensions: the comprehensive index calculated by the principal component analysis method and corporate profitability.The corporate scale,equity concentration and cash are introduced as control variables.it also studies if the impact of R&D investment has a lagging effect on firm performance.The empirical research conclusions are: Firstly,During the period from 2016 to 2019,the scale of environmental protection companies is relatively similar;the concentration of equity is relatively high;the profitability,development ability,solvency and operating ability are significantly differentiated;Average of R&D expenditure investment intensity is 7.74%,the R&D expenditure investment intensity is relatively high;the overall performance of enterprises has difference.Secondly,R&D investment is significantly negatively correlated with the current company’s comprehensive performance;R&D investment is significantly negatively correlated with the current company’s profitability;R&D investment is signifycantly negatively correlated with the lagging second-stage company’s comprehensive performance;R&D investment is significantly negatively correlated with the lagging first-stage,second-stage,and third-stage corporate profitability.Thirdly,R&D investment has a significant negative impact on the current company’s overall performance and profitability.R&D investment has no influence on the overall performance of lagging second-stage enterprises,and R&D investment has no influence on the profitability of lagging first-stage,lagging second-stage,and lagging third-stage enterprises.No lagging effect of R&D investment on enterprise performance is found.When investigating the reasons,it finds that environmental protection companies are facing problems such as lack of effectiveness of R&D investment,long R&D cycle,low R&D efficiency,low R&D management level,imperfect R&D information disclosure system and etc.In order to promote the sustainable development of R&D activities of environmental companies listed on New OTC Market,the government needs to improve the R&D information disclosure system and strengthen the support for R&D activities.Environmental protection companies need to improve the R&D information disclosure system,shorten the R&D cycle,improve R&D efficiency,and improve R&D management level,and maintain long-term and effective R&D investment.The research is of reference significance to the R&D management of environmental protection companies,and provides a reference for environmental protection companies to improve their firm performance.