The Primacy of Innovation in Strategic Financial Management Understanding the Impact of Innovation and Performance on Capital Structure

Nosheen, S., Sadiq, R. & Rafay, A. (2016). The Primacy of Innovation in Strategic Financial Management-Understanding the Impact of Innovation and Performance on Capital Structure: Proceedings of the 2016 IEEE International Conference on Management of Innovation and Technology (ICMIT), Thailand.

6 Pages Posted: 25 Oct 2016

See all articles by S. Nosheen

S. Nosheen

University of Management and Technology (UMT), Pakistan

Ramla Sadiq

University of Management and Technology (UMT), Pakistan - School of Business and Economics

Abdul Rafay

University of Management & Technology (UMT), Pakistan

Date Written: October 25, 2016

Abstract

This paper intends to determine the impact of pursuing a strategy for innovation on capital structure decisions and performance. It builds on the R&D management research which is country-focused and utilizes an international sample. This is significant when considering the sample of the study. While past studies have focused on single country samples, this study utilizes the most innovative firms in the world, thereby raising a new aspect in the innovation theory. Interestingly, this study finds that directionality of leverage, R&D investment and performance relationships observed appear to be contrary to existing research. This is attributed to the cross-country characteristics within the sample. This study differs from existing research by indicating variations in patterns of advertisement intensity and R&D investment across countries, as well as variations in patterns of innovation scores and business sophistication. Future research may explore the country characteristics associated with firms that pursue a strategy for innovation.

Keywords: Capital structure, Innovation, Leverage, Profitability, R&D investment

Suggested Citation

Nosheen, S. and Sadiq, Ramla and Rafay, Abdul, The Primacy of Innovation in Strategic Financial Management Understanding the Impact of Innovation and Performance on Capital Structure (October 25, 2016). Nosheen, S., Sadiq, R. & Rafay, A. (2016). The Primacy of Innovation in Strategic Financial Management-Understanding the Impact of Innovation and Performance on Capital Structure: Proceedings of the 2016 IEEE International Conference on Management of Innovation and Technology (ICMIT), Thailand., Available at SSRN: https://ssrn.com/abstract=2858701

S. Nosheen

University of Management and Technology (UMT), Pakistan ( email )

Johar Town - Phase 1
Lahore, Punjab 54770
Pakistan

Ramla Sadiq

University of Management and Technology (UMT), Pakistan - School of Business and Economics ( email )

Johar Town - Phase 1
Lahore, 54000
Pakistan

Abdul Rafay (Contact Author)

University of Management & Technology (UMT), Pakistan ( email )

C-II
Johar Town
Lahore, Punjab 54770
Pakistan
924235212801-10 (Phone)

HOME PAGE: http://www.umt.edu.pk

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