ABSTRACT
This chapter presents findings on the relationships between changes in catalyst financial commitments (i.e., research and development projects and capital improvements) and changes in productivity and profitability, and the relationship between productivity and profitability. Since benefits of some investment projects are not realized in the year of the increase in investments, the study also considers time lags between changes in substantial investments in research and development projects and capital improvements and changes in productivity and profitability. The findings identify significant positive or negative relationships among the variables. Positive relationships imply that increased investments in research and development projects and/or capital improvements have positive effects on productivity and/or profitability. Negative relationships imply that a company has not made wise investments. Because each of these four industries is represented by very few companies in the sample, making reasonable conjectures about the reasons for these results is very difficult.
