Research and development (R however, there is a lack of empirical evidence. Therefore, this study empirically analyses the relationship between R&D, capital investments, and the US firms' profitability. A regression analysis was conducted using data from US stock market-listed firms between fiscal years (FY) 2010 to 2021. The results indicate a significantly negative R&D ratio coefficient for all years. Additionally, the capital investment ratio coefficient was significantly positive in FY2019 and FY2021. However, for FY2011 it was positive but insignificant. The coefficients were significantly negative for all other years. The results indicate decreased efficiency of R&D investments by US firms, indicating opportunities to enhance their profitability. Moreover, the findings contribute to the existing literature and will assist practitioners make more informed management-related decisions.
Suzuki et al. (Wed,) studied this question.