Abstract
The importance of research and development (R&D) for business sustainability have gained increasing interests, especially in the high-tech sector. However, the efforts of R&D might cause complex and mixed impacts on the financial results considering the associated expenses. Thus, this study aims to examine how R&D efforts may influence business to improve its financial performance considering the dual objectives: the gross and the net profitability. This research integrates a rough-set-based soft computing technique and multiple criteria decision-making (MCDM) methods to explore this complex and yet valuable issue. A group of public listed companies from Taiwan, all in the semiconductor sector, is analyzed as a case study. More than 30 variables are considered, and the adopted soft computing technique retrieves 14 core attributes—for the dual profitability objectives—to form the evaluation model. The importance of R&D for pursuing superior financial prospects is confirmed, and the empirical case demonstrates how to guide an individual company to plan for improvements to achieve its long-term sustainability by this hybrid approach.
Highlights
The importance of research and development (R&D) for the high-tech industry has been discussed broadly; the relationship between R&D efforts and financial prospects has gained surging interests in the recent years
The central purpose of this study is to deepen our understanding of the influence of R&D on financial performance (FP) for the two financial prospects: the gross and the net profitability, which are critical to business sustainability in the long-term
This study has explored the influences of R&D to reach the dual financial objectives of semiconductor companies to achieve business sustainability
Summary
The importance of research and development (R&D) for the high-tech industry has been discussed broadly; the relationship between R&D efforts and financial prospects has gained surging interests in the recent years. Compared with the previous research that mainly relied on statistics to examine the relationship between R&D and subsequent performance, the present study tries to distinguish the influence of R&D on the gross and the net profitability and can support and guide a company to reach its financial target. It is, the aim of the proposed approach to find the imprecise knowledge from historical data and support semiconductor businesses to plan for R&D or financial strategy based on their expected profitability objectives. Machine learning capability of the soft computing and the decision model formed by domain experts’ experience—to explore this important issue
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