The impact of R&D expenditure and internationalization on firm performance

Abstract

The study aims at examining the short-run and long-run influence of R&D activities and internationalization on firm performance. R&D expenditure and internationalization are two main variables of studying. Findings are validated using regression analysis and correlation analysis. Using large sample of data of Chinese firms from the period of 2010 to 2018, the results of study suggest that (1) R&D activities and internationalization influence firm performance negatively in the short term and positively in the long term; and (2) internationalization has a moderating effect on the relationship between R&D activities and firm performance. While the inferences are limited to Chinese capital market, this study may be of interest to managers and regulators in other markets.