MULTI-GROUP R&D AND SALES PERFORMANCE IN THE UNITED STATES

Lawrence McNeil
Gbenga Ojumu
Prairie View A&M University

ABSTRACT
Innovation is a well-known and important determinant of firm performance. From
improvements to productivity or streamlining costs, firms that innovate tend to excel in the
acquisition of market share and the expansion of output. Also, they benefit from growth-enhancing
partnerships. This study explores the relationship between R&D investment and sales within
seven U.S. industries during the years 2007 and 2012. The first goal is to understand the impact
of R&D investment within the current period. Second, this study accounts for the degree to which
R&D’s impact is affected by the race/ethnicity of firm owners. While some results were mixed, it
was found that current period R&D investment has a negative relationship with sales even when
controlling for the race/ethnicity of firm owners.
Keywords: Innovation, R&D, sales, investment, race, ethnicity