Analysis of the correlation between the companies’ investment in research, development and profitability, and the countries’ competitiveness and innovation capability

Abstract

Objective: This study aims to analyze the relationship between the percentage of investment in R\&D and the percentage of profitability of companies with the competitiveness and innovation capacity of the countries, aiming to identify whether the companies that invest the most in R\&D and the most profitable are located in countries with the highest levels of competitiveness and innovative capacity. Methodology/Approach: The R\&D investment and company profitability indices were extracted from the EU Industrial R\&D Investment Scoreboard, 2018 edition; and for the competitiveness and innovation capacity scores of the countries, the Global Competitiveness Report 2018 was used. The relationships between the variables were analyzed using: i) twoway ANOVA to examine the influence of two different categorical independent variables; ii) Tukey's post-hoc test, to identify the location of significant differentials. Four hypotheses were raised to analyze the relationships of interest. Originality / Relevance: The findings of this study contradict some studies that stated that innovations in companies contribute to the development of the countries that are located. Results: After applying ANOVA to the relationships, it was found that none of the relationships were statistically significant. Theoretical / methodological contributions: The findings of this study demonstrated that the companies that invest the most in R\&D and the most profitable ones are not necessarily located in the most competitive countries with the greatest capacity for innovation.