Effectiveness of the financial management in terms of R&D activities across selected stock companies in Poland

Abstract

The purpose of the study is to determine the financial impact of expenditure on research and development activities (R&D) of selected companies listed on the Warsaw Stock Exchange. The work is based on reports of 44 such companies, which conducted R&D activities between 2015 and 2017. Expenditure on R&D was taken as a diagnostic variable in the assessment of a given company’s management efficiency. The financial condition was assesed using three diagnostic indicators: the return of assets, current liquidity levels and debt ratio. The two first were assumed to be stimulants, while the third was taken to be destimulant. A scoring method—recommended among others by M. Tarczyńska—Łuniewska and W. Tarczyński—was used to construct a complex measurement of the overall financial condition. The methodology adopted was based on the results of studies conducted by (among others) Baruch, Hurwitz, Lines and Schmidt, Walczak, as well as Glova, Dancakova and Suleimenova. The results observed made for an examination of a subtle relationship between financial results of the companies with the levels of R&D activities conducted. It was found that there was no significant impact of research activities on the financial condition and management effectiveness of the selected enterprises.

Keywords

• r&d activities
• intangibles
• listed companies
• financial performance
• business excellence