Does innovation lead to growth? An SDG for companies in the Black Sea markets before and after COVID-19


  • Katerina Lyroudi
  • Thomas Chatzigagios


R&D Investment, Firm Performance, Value, Growth


Based on the agenda 2030 for a healthier, safer and more prosperous world, were 17 sustainable development goals (SDGs) were proposed pertinent to economic, social and environmental aspects. One of these goals, namely number 8, is about “promoting sustained, inclusive and sustainable economic growth”. One of the factors promoting economic growth is innovation for the economy as a whole and for individual corporations. During the last decades, the economy in most of the developed countries has been transformed from a production to a knowledge economy. Expenditure for research and development (R&D) and company intangible assets serve as a proxy for innovation for the companies considered. Therefore, the existence of intangible assets in a company indicates that it pursues a level of innovation; furthermore, the higher the innovation, the more competitive advantages for the company and the higher its potential for survival and growth in future globalized markets. Our objective in this paper is to examine the research question, i.e., whether the existence of more innovation proxied by intangible assets or/and by R&D investment undertaken by a company leads to increasing market value, better performance, and future growth in the years before and after the COVID-19 pandemic. This study focuses on companies of Black Sea countries: Bulgaria, Georgia, Romania, Russia, Turkey, and Ukraine. From a preliminary examination of data obtained from the Thomson EIKON database, we found that research and development expenses are not reported in the case of most Bulgarian and Russian companies and only very few of Romanian and Turkish companies prepare such reports, while there are no data at all for the listed companies of the Georgian and Ukrainian markets. Hence, we limit our investigation to the three out of the six markets, specifically to the Balkan area countries, i.e., the companies listed in the stock markets of Bulgaria, Romania, and Turkey. For the examination of testable hypotheses, we use correlation and regression analysis. Results will shed more light on this issue and will help practitioners plan their strategy, accordingly; moreover, scholars will learn more about this intricate relationship, especially in the framework of developing economies.