Analysis finds a positive relationship between R&D costs and firm size in the Indian auto sector, suggesting R&D investment and market capitalization impact performance.
Technical advances and inventions will enhance business and financing in Research and Development support, enabling competitors to compete in open markets. The study focused on the research and development (R&D) cost and whether investments in R&D, market capitalization, and performance impact the size of the firm. The study utilised R&D costs as a control factor and business performance as an independent factor that influences the firm size. Historical data from publicly accessible firm accounting records were used in this investigation. The samples are selected from NSE/BSE-listed automobile companies using purposive sampling. Based on the literature, it became necessary to analyse the commercial conditions, market capitalization, firm size, and R&D of the automobile industry. This study examined the impact of R&D costs, market capitalization, and commercial conditions on firm size. Including that firm size is treated as a dependent variable. A total of 150 data points were analysed to test the hypothesis for the period from 2010 to 2024, covering nominated automotive businesses. The results indicate that for certain Indian automobile manufacturers, research and development expenses are crucial, and they have a significant and positive relationship with the Size of the Firm. Including the control variable also optimizes the size, except for Return on Assets (Profitability). The moderator of the research is assessed by multiplying Market Capitalization and Research and Development Cost.
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S. et al. (2025) studied this question.
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