The Impact of Research and Development Expenses on Operating Revenue

Abstract

With the advancement of technology and the development of the knowledge economy, the improvement of enterprise research and development capabilities has become a key factor in promoting enterprise competitiveness and economic growth. This study takes Chinese manufacturing enterprises as an example to explore the impact of the number of R&D personnel and R&D investment costs on operating income. Using the two-stage least squares (2SLS) model and the industry dataset for analysis, the study found that as the number of R&D personnel increased, R&D investment costs increased, significantly increasing the company's operating income. Although the model has limitations such as industry limitations, spatial limitations, and variable limitations, the research results still emphasize the positive impact of R&D investment on the economic benefits of enterprises. The study also provides suggestions on how to improve research accuracy and how to enhance enterprise research and development capabilities. Finally, it is concluded that improving R&D capabilities and allocating R&D investment reasonably are of great significance for manufacturing enterprises, which will help improve the company's operating revenue and overall competitiveness.