Effect of Research and Development (R&D) on Company Performance in Cameroon: An Application of the Generalized Propensity Score

R&D expenditure is a must for any company wishing to remain competitive and sustainable in this globalized world. However, they need to be controlled to ensure that they do not have a rather unfavorable effect due to market uncertainty. For this reason, this article analyzes the effect of R&D on company performance in Cameroon. The latter is measured by value added on the one hand, and net profit on the other. The study is based on a sample of 162 Cameroonian companies having invested in Research and Development (R&D). This sample is taken from the survey on the determinants of business performance in sub-Saharan Africa carried out in 2014 by the International Development Research Centre (IDRC). The results of the generalized propensity score estimation show that in Cameroon, company performance indicators grow monotonically as R&D expenditure increases These results are confirmed by the robustness analysis performed by applying the Generalized Propensity Score under the generalized linear and quantile approach. Thus, companies in Cameroon need to take advantage of government R&D subsidies and appropriate the results of research carried out in universities and research centers, and train their employees on an ongoing basis to promote R&D within the company and improve performance.