The effects of R&D investment on firm performance

This study studies the effects of R&D investment on firm performance. Firm performance is measured in financial performance and market-based performance. Among (formerly) publicly listed companies from the Netherlands, Belgium and Luxembourg data is used. Extra attention is paid to manufacturing companies in comparison with the non-manufacturing companies. The financial firm performance is positively affected by R&D investments. Significant results are found for the financial performance, the Return on Assets. The findings of the price-to-book ratio are significant. Differences for manufacturing and non-manufacturing companies are insgnificant with the used data and not consistent over the financial and market-based performances.