The largest spender wins? An empirical study of how R&D expenditure drives firm growth in listed Swedish companies.

The main purpose of this study is to enhance the analysis of the impact of R&D expenditure on firms’ growth. This study adopts an OLS regression for a data sample of 46 firms listed on Nasdaq Stockholm for the 2006-2019 period. We present models with R&D expenditure and R&D intensity as the main mechanisms of firm growth, defined as sales growth in this study. Furthermore, firm size, firm age and sector belonging determining the R&D and sales growth relationship are also investigated. We find that R&D intensity has a statistically significant negative impact on firm growth, while R&D expenditure does not show a statistically significant relationship to firm growth. Thus, the results of this paper suggest that devoting a higher proportion of your sales to R&D activities does not translate into firm growth