THE INFLUENCE OF RESEARCH AND DEVELOPMENT AND PATENT ACTIVITY ON BUSINESS PERFORMANCE: THE CASE OF HIGH-TECHNOLOGY COMPANIES

Abstract

The purpose of the work is to determine the impact of R&D activities and patent activity on the business performance of high-tech companies with the largest number of patent applications according to the records of the World Intellectual Property Organization (WIPO).The research sample consists of 33 high-technology companies that were continuously on the WIPO's Top 50 PCT applicants list in the period from 2013 to 2020. Regression analyses have been performed to determine the impact of R&D activity and patent activity on the business performance of high-technology companies.The research confirms the importance of R&D and patent activity for the business performance of high-technology companies. This study revealed that R&D investment, number of granted patents and published PCT applications have a positive influence on sales revenue, gross profit, operating profit, earnings before interest and taxes, earnings before interest, taxes, depreciation, and amortization, market capitalisation. The positive influence of patent activity indicators on return on equity is also present; however, the influence of R&D investment on return on equity is negative.The research results have significant implications for R&D, intellectual property and corporate managers of high-tech companies in terms of significantly improving the efficiency of R&D investments and their impact on company’s profitability. Also, there are significant implications related to improving the effectiveness of the innovation process and patent activity and their impact on other business performance.The originality of this study is reflected in studying the influence of patent activity indicators on gross profit, earnings before interest and taxes, earnings before interest, taxes, depreciation, and amortization, and return on equity.