Year of Graduation
Impact of Innovation Activity on the Performance of Companies
In the modern world, innovation potential has an increasing impact on the success of the company and is a key factor in the long-term growth of the company's value. The purpose of this study is to assess the impact of patenting on the company's profitability, and on capital costs. For this, data on the book value of patents, capital costs are used. Panel data analysis for 135 Chinese companies for the period 2010 – 2015 confirmed the positive impact of patents on the profitability of companies with a lag of 1 year, and an immediate positive impact on capital costs. In addition to obtaining a patent for an invention, companies also make capital expenditures in order to bring an innovative product to the market, after which the operating profitability grows, both because of increased sales, and because of increased operational efficiency.