Role of R&D expenditure, CEO compensation and financial ratios for country's economic sustainability and innovative growth

Анотація

In this paper, we combine to evaluate interrelation of the financial performance indicators of companies from different European countries, rewards paid to CEO (compensation), companies' research and development (R&D) expenditure, changes in sustainability and innovativeness of country's economy. In this paper, economic sustainability is treated as economic growth in a long-term perspective, based on long-term value-added innovations. In this perspective, companies are one of the main sources in delivering financial/economic value from innovation for the country. That is why there are ongoing discussions to determine the links between companies' R&D, managers making risky decisions and countries economic development. The results of our research reflect the assumptions that companies' efficiently managed financial resources and financially motivated top-level managers targeting to accept the risk for R&D can contribute not only to increasing of company's economic potential, but also to the sustainability of a country's economy. These results reflect the assumptions that companies' efficiently managed financial resources and financially motivated top-level managers targeting to accept the risk for R&D can contribute not only to increasing of company's economic potential, but also to the sustainability of a country's economy.

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