R&D investment and SMEs performance: the role of capital structure decisions

IF 3.8 Q2 BUSINESS EuroMed Journal of Business Pub Date : 2024-07-02 DOI:10.1108/emjb-11-2023-0311

Sarmad Ali, Hussain Muhammad, Stefania Migliori

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Abstract

Purpose

This paper examines the moderating role of capital structure decisions in the relationship between research and development (R&D) investment and small and medium enterprises (SMEs) performance.

Design/methodology/approach

Based on panel data of 1,357 European SMEs from 2014 to 2020, this study employs a generalized method of moments (GMM) regression to examine the R&D-performance link through the moderating role of capital structure.

Findings

The results show that R&D investment and equity financing positively and significantly influence SMEs performance. Debt financing, however, is negatively and significantly associated with SME performance. In addition, we show that capital structure choice significantly moderates the relationship between R&D investment and SME performance. Specifically, debt financing attenuates the positive impact of R&D investment on SMEs performance, whereas equity financing accentuates this relationship.

Practical implications

This study helps policymakers formulate appropriate policies to overcome the challenges of underinvestment in R&D projects to enhance SMEs performance.

Originality/value

Our findings provide new evidence on R&D-performance literature by refining the deeper understanding of the role of capital structure, which has previously been examined in partial and fragmented ways.

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研发投资与中小企业绩效：资本结构决策的作用

本文探讨了资本结构决策在研发（R&D）投资与中小型企业（SMEs）绩效之间关系中的调节作用。研究结果结果表明，研发（R&D）投资和股权融资对中小型企业绩效有显著的正向影响。然而，债务融资与中小企业绩效呈显著负相关。此外，我们还发现，资本结构选择对研发投资与中小企业绩效之间的关系有明显的调节作用。本研究有助于政策制定者制定适当的政策，以克服研发项目投资不足的挑战，从而提高中小企业的绩效。原创性/价值我们的研究结果为研发绩效文献提供了新的证据，完善了对资本结构作用的深入理解。

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来源期刊

EuroMed Journal of Business BUSINESS-

CiteScore

9.80

自引率

19.20%

发文量

期刊介绍： The EuroMed Journal of Business (EMJB) is the premier publication facilitating dialogue among researchers from Europe and the Mediterranean. It plays a vital role in generating and disseminating knowledge about various business environments and trends in this region. By offering an up-to-date overview of emerging business practices in specific countries, EMJB serves as a valuable resource for its readers. As the official journal of the EuroMed Academy of Business, EMJB is committed to reflecting the economic growth seen in the European-Mediterranean region. It aims to be a focused and targeted business journal, highlighting environmental opportunities, threats, and marketplace developments in the area. Through its efforts, EMJB promotes collaboration and open dialogue among diverse research cultures and practices. EMJB serves as a platform for debating and disseminating research findings, new research areas and techniques, conceptual developments, and practical applications across various business segments. It seeks to provide a forum for discussing new ideas in business, including theory, practice, and the issues that arise within the field.