R&D Activity and Operating Performance of Small and Medium Sized Enterprises (SMEs): The Case of a Small Open Economy

Journal of Accounting and Taxation, Vol. 8(4), pp. 40-50, September, 2016 DOI: 10.5897/JAT2016.0233

11 Pages Posted: 18 Nov 2016

See all articles by Eleftherios Aggelopoulos

Eleftherios Aggelopoulos

University of Patras, Department of Business Administration

Antonios Georgopoulos

University of Patras - Business Administration

Nikolaos Eriotis

National and Kapodistrian University of Athens

Anastasios Tsamis

Panteion University of Athens

Date Written: November 12, 2016

Abstract

The paper investigates the impact of R&D activity on operational performance of Small- and Medium-sized Enterprises (SMEs). Prior studies have indicated that R&D activity improves market performance of large listed companies in advanced economies. We extend the research objective on the operational performance of SMEs in the small open Greek economy in which SMEs are normally not listed companies operating in a “bank-driven” financial system. The empirical results highlight the positive role of R&D investment in the performance improvement of SMEs, especially in the increase of operating cash flows and gross profit margins. Furthermore, the results indicate that the performance impact of R&D activity is moderated by the life cycle and firm size, but it does not depend on the technological intensity of the industry. Overall, the findings suggest that R&D activity may be a positive factor in the enhancement of operational performance of SMEs.

Keywords: financial accounting, R&D, operating performance

JEL Classification: M41

Suggested Citation

Aggelopoulos, Eleftherios and Georgopoulos, Antonios and Eriotis, Nikolaos and Tsamis, Anastasios, R&D Activity and Operating Performance of Small and Medium Sized Enterprises (SMEs): The Case of a Small Open Economy (November 12, 2016). Journal of Accounting and Taxation, Vol. 8(4), pp. 40-50, September, 2016 DOI: 10.5897/JAT2016.0233, Available at SSRN: https://ssrn.com/abstract=2868408

Eleftherios Aggelopoulos (Contact Author)

University of Patras, Department of Business Administration ( email )

University Campus
Patras, 26504
Greece

Antonios Georgopoulos

University of Patras - Business Administration ( email )

Patras
Greece

Nikolaos Eriotis

National and Kapodistrian University of Athens ( email )

5 Stadiou Strt
Athens, 12131
Greece

Anastasios Tsamis

Panteion University of Athens ( email )

Athens
Athens 117 45
Greece

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