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This study aims to investigate the influence of R&D expenditure on the performance of the firms in the USA during the period 2018–2023. This study selected 40 US-based corporations listed in Business Week's top 100 global information technology firms, with at least $300 million in revenue from 2018–2023. For empirical analysis, the static panel data technique has been employed. Our results concluded that current-year R&D expenditure has a negative effect on current-year financial performance. In contrast, the lagged-year R&D expenditure has a strong and positive impact on the current-year financial performance of the firms. It is also observed that the effect of R&D expenditure is found to be higher on ROE than ROA. Furthermore, the size of the firm fosters profitability whereas, leverage reduces the firm's profitability. It is recommended that policymakers should consider modified activities to support the R&D expenditure, recognizing the long-term effect of R&D in subsequent years.

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The Effect of Research and Development Innovation Cost on the Financial Performance of United States Firms

  • 会议论文

  • 发表日期：

    2026年

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  • Hussein Alrabba,
  • Ammer Alhammouri,
  • Muhannad Akram Nazzal,
  • Ali Naser Al Khattab

摘要

This study aims to investigate the influence of R&D expenditure on the performance of the firms in the USA during the period 2018–2023. This study selected 40 US-based corporations listed in Business Week's top 100 global information technology firms, with at least $300 million in revenue from 2018–2023. For empirical analysis, the static panel data technique has been employed. Our results concluded that current-year R&D expenditure has a negative effect on current-year financial performance. In contrast, the lagged-year R&D expenditure has a strong and positive impact on the current-year financial performance of the firms. It is also observed that the effect of R&D expenditure is found to be higher on ROE than ROA. Furthermore, the size of the firm fosters profitability whereas, leverage reduces the firm's profitability. It is recommended that policymakers should consider modified activities to support the R&D expenditure, recognizing the long-term effect of R&D in subsequent years.