The Effect of Research and Development Expenses on Firm Performance

Abstract

This Research aims to examine the effect of research and development expense on the firm performance. The dependant variable which is the firm performance is measured by return on assets (ROA), and the independent variable which is research and development is measured by the research and development expense located in the income statement. The Researchers hypothesized that there was a positive significant relation between research and development expenses and firm financial performance. The methodology in this research was conducted by Statistical Packages for Social Sciences (SPSS) program. Data used is secondary data from five international companies in the technology sector for six years from 2012 to 2017. The significance level for the research is .00011678 ≈ 0% which indicate that there is a Positive Significant relationship between Research and Development expense and Firm Performance. Keywords: R&D, Firm Performance, ROA, Research and Development Expense, Technology Sector.