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The Impact of Government Support Measures on Investment in R&D and on Company Performance

Author

Listed:
  • Viktoriya A. Cherkasova

    (HSE University, Moscow, Russian Federation)

  • Alina P. Glushenkova

    (PJSC “Cherkizovo Group”, Moscow, Russian Federation)

Abstract

The purpose of this article is to assess the impact of investment in research and development (R&D) on the efficiency of companies, taking into account the effect of various government support instruments. Among such measures of state support, the following stand out: tax incentives, accelerated depreciation, and the level of legal protection of intellectual property. The analysis uses data from 1,340 public companies in the US, UK, Japan, and China for the period from 2020 to 2023. Panel regression models with clustered standard errors were used as the methodology. Cross-effect models were used to assess the interactions between factors. The results showed that investment in innovation reduces the financial performance of companies. The institutional mechanism for protecting intellectual property mitigates the negative effect of investment in R&D, as it reduces the risk of copying results and increases the likelihood of return on investment. The smoothing effect of institutional legal protection is particularly pronounced in the low-tech sector, where companies are more dependent on external institutional support. The study failed to identify a significant impact of either tax incentives or accelerated depreciation on companies’ financial results in the short term. The conclusions drawn are of practical significance for the state in the development of innovation support policies, as well as for businesses in selecting effective incentive tools to stimulate R&D investment in line with the company’s strategic priorities, and for private investors in assessing the risks and innovation potential of companies in various industries.

Suggested Citation

  • Viktoriya A. Cherkasova & Alina P. Glushenkova, 2026. "The Impact of Government Support Measures on Investment in R&D and on Company Performance," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 1, pages 76-94, February.
    • Handle: RePEc:fru:finjrn:260105:p:76-94
    DOI: 10.31107/2075-1990-2026-1-76-94
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    References listed on IDEAS

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    1. Wesley M. Cohen & Richard R. Nelson & John P. Walsh, 2000. "Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)," NBER Working Papers 7552, National Bureau of Economic Research, Inc.
    2. Chen, Yiqi & Ibhagui, Oyakhilome W., 2019. "R&D-firm performance nexus: New evidence from NASDAQ listed firms," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
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    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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