Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 110

Full Length Research Paper

R&D activity and operating performance of small and medium-sized enterprises (SMEs): The case of a small open economy

Eleftherios Aggelopoulos
  • Eleftherios Aggelopoulos
  • Department of Business Administration, University of Patras, University Campus, 26504 Rio, Patras, Greece.
  • Google Scholar
Nikolaos Eriotis
  • Nikolaos Eriotis
  • Department of Economics, National University of Athens, Stadiou 5, 10562, Athens, Greece.
  • Google Scholar
Antonios Georgopoulos
  • Antonios Georgopoulos
  • Department of Business Administration, University of Patras, University Campus, 26504 Rio, Patras, Greece.
  • Google Scholar
Anastasios Tsamis
  • Anastasios Tsamis
  • Department of Public Management, Sygrou 136, 17672, Athens, Panteion University, Greece.
  • Google Scholar


  •  Received: 26 July 2016
  •  Accepted: 14 September 2016
  •  Published: 30 September 2016

Abstract

The study 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. 

Key words: Financial accounting, R&D, operating performance.