Exploring the Relationship between R&D Investment and Business Performance—An Empirical Analysis of Chinese ICT SMEs

Service and product innovation have been emphasized as being essential to the success of ICT firms in numerous studies. Being ongoing processes, R&D activities make it challenging forecast benefits a business. Does company obtain immediate returns on its research development expenditures? How long will their effectiveness remain? During strategy, business managers must take all these factors into account. A major objective this paper is determine relationship between company’s investment performance. We collected data from 1262 small- medium-sized enterprises service industry China 2011 2020. The was selected independent variable, while financial performance (ROA, ROE, liquidity ratio, debt asset interest cover ratio) market value (Tobins’ Q) were dependent variables. Multiple linear regressions used whether there correlation Firstly, improve current profitability one-period lag benefits. Second, negatively correlated with short-term debt-paying ability, but positively long-term view, effects last for one period. Lastly, has negative impact value, within two lagged periods still positive impact. This study addresses significant gap empirical research. Recommendations companies consider when making decisions are also included paper.