Analysis of the Relationship between Research and Development Intensity and Sectoral Performance: The Case of Czech Republic

Abstract

The authors decided to verify the axiom of the key positive impact of research, development and innovation on a firm's prosperity. A sample of companies, the main scope of business of which is CZ-NACE M72 Research and development, were analyzed. Based on a comparison of economic results of this sample with average values of the other 10 branches, two hypotheses were verified. Analysis of the sample of companies in the branch of research and development showed that intensity of research and development need not impact a firm's performance in a dominant way. This is confirmed by variable results of the reached values of return on equity, return on assets, the spread of economic value added in years 2014 to 2017 and assets turnover ratio, gross profit margin, value-added in revenues and value-added per worker in years 2015 to 2017. The investigation did not confirm the continuously higher level of performance of companies in the research and development branch with statistical significance even in the subsequent elimination of possible property interconnections within subsidiaries and parent companies.