Innovation and financial performance in telecommunication companies

Abstract

Exploring the link between innovation and financial performance, this study focuses on financial measures that are commonly used by investors and financial analysts. Most of them are profitability ratios that can be calculated from the financial statements of a company, such as return on equity (one of the key financial ratios for shareholders), return on assets and operating margin. Successful product innovation management requires a strong market orientation providing high quality products consistent with customers’ needs, attractive price and innovative product features. The results may be useful for researchers and managers of firms operating in a similar industry in order to determine key performance indicators for both innovation and profitability measures.