THE INFLUENCE OF THE GROWTH OF R & D EXPENSES ON RENTABILITY OF INVESTED CAPITAL IN AUTO-INDUSTRY

Đorđe Dabetić, Jana Cvijić Rodić, Ivana Vujanić

Апстракт


The uncertainty and risk posed by new, more and more comprehensive technological changes threaten the ability of innovative and intensive industries to realize the grow of return on invested capital. Automotive industry, information and software companies and pharmaceutical companies are at the forefront of the investments in R&D expensive. This reflects on the increased prudence of investors and their turn to safest industries which offer more prospective opportunities for higher profits. Therefore, the aim of this paper was to point out on the example of car companies the importance of understanding the need to maximize return on invested capital. The research carried out was based on the assumption that the race for new innovative investments slows down the profitability of the auto industry. In order to prove this hypothesis, the paper analyzes how the growth of R & D costs in the five largest car companies is maintained on the movement of the rate of return on capital, and on other business performances.
The analysis included exclusively large car companies, that is, those that are the leader in the level of realized income, net profit, capital values and market prices. These companies are also leading the level of investment in research and development, which from the standpoint of the subject of this work contributed to the representativity of the research sample. The obtained results confirmed the initial hypothesis based on the assumption that a high level of R & D costs slows the profitability of the car company. This is verified by comparing the regression correlation values obtained between the observed research costs, as independent variables and the value of the realized income, gross margin, ebits margins, net margins and ROICs, as dependent variables
The obtained results showed that the high level of ultraviation in new technologies has a positive effect on the growth of revenues, gross profit, ebits and net margins in the auto industry, but slowing the growth of profitability of this significant economic branch. An additional analysis related to determining the impact of R & D costs on the movement the rates of return on invested capital in selected pharmaceutical and information companies, which are also characteristic of large R & D investments. This comparison has confirmed that the cost of research and development investment is the most burdensome for the auto industry, as the information sector and the pharmaceutical industry, despite large investments, have relatively high returns on invested capital.


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DOI: http://dx.doi.org/10.7251/EMC1901152D

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ISSN 2232- 8823          EISSN 2232-9633

UDK: 33

IZDAVAČ:
Panevropski univerzitet “APEIRON”
FAKULTET POSlOVNE EKONOMIJE
Pere Krece 13, 78102 Banja Luka, BiH/RS
www.apeiron-uni.eu

Odgovorno lice izdavača:
DARKO Uremović

Urednik izdavača:
ALEKSANDRA Vidović

Glavni i odgovorni urednik:
Zorka Grandov

Urednik:
SANEL Jakupović

Uređivački odbor / International members:

Prof. Dr. Esad Jakupovic, academic, Pan - European University Apeiron Banja Luka, Bosnia and Herzegovina
Prof. Dr. Zoran Avramovic, academic, Pan European University Apeiron Banja Luka, Bosnia and Herzegovina
Prof. Dr. Vuk Ognjanović, Faculty of Transportation, communications and logistics, Berane, Montenegro
Prof. Heri Bezić, Dean, Faculty of Economics, University of Rijeka, Croatia
Prof. Dr. Vinko Kandžija, Faculty of Economics, University of Rijeka, Croatia
Prof. Dr. Vlatka Bilas, University of Zagreb, Faculty of Economics, Croatia
Doc. Dr Anica Hunjet, University North, Varazdin, Croatia
Prof. Dr. Mirko Tripunovski, dean, FON University in Skopje, Macedonia
Prof. Dr. Bojan Rosi, Dean, Faculty of Logistics Celje, University of Maribor, Slovenia
Prof. Dr. Nenad Vunjak, Dean, Faculty of Economics in Subotica, University of Novi Sad, Serbia
Prof. Dr Slađana Barjaktarović - Rakocevic, Vice Dean, Faculty of Organizational Sciences (FON), Belgrade, Serbia
Prof. Dr. Kıymet Tunca Caliyurt, Trakya University Edirne, Turkey


Redakcijski odbor:

MARKO Laketa, Panevropski univerzitet Apeiron, BiH
ALEKSANDRA Vidović, Panevropski univerzitet Apeiron, BiH
DRAGAN Kolev, Panevropski univerzitet Apeiron, BiH
MAJA Đokić, Panevropski univerzitet Apeiron, BiH
JANA Aleksić, Panevropski univerzitet Apeiron, BiH
NINA Uremović, Panevropski univerzitet Apeiron, BiH
VANJA Sredojević, Panevropski univerzitet Apeiron, BiH
ŽIVANA Kljajić, Panevropski univerzitet Apeiron, BiH


Sekretar i tehnička podrška:
MARICA Banović

Lektor srpskog jezika:
TANJA Ančić

Lektor engleskog jezika:
STOJANKA Radić

Tehnički urednik:
SRETKO Bojić

Web dizajn:
SINIŠA Kljajić

Štampa:
Markos, Banja Luka

Tiraž:
300

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crossref.org
road.issn.org
erihplus.nsd.no 

 

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