Implications of Research and Development on Business Performance: Evidence from Firm’s Survey in Uttar Pradesh, India

Tabassum Ali ., Aftab Alam ., Meraj Salim .


The key objective of this study is to analyse the implications of research and development on the performance of business sector in Uttar Pradesh, India, based a comprehensive survey of 525 firms operating in the state and conducted under the World Bank’s Enterprise Survey, 2014. The survey contained information on a variety of enterprise characteristics such as location, size of firms, type of firms, age and gender of ownership and business performance indicators such as cost of production, employment generation and output. To understand the difference in business performance, the surveyed business firms have been categorized into two groups (i) firms with formal research and development expenditure and (ii) firms without formal research and development expenditure. Simple statistical tools such as descriptive statistics and t-test have been used to analyse the data using Statistical Package for the Social Sciences (SPSS) version 20.0. Empirical evidences clearly indicate that there has been positive relationship between firm’s performance and research and development investment across industries and countries. Out of the total 525 firms surveyed under the World Bank’s Enterprise Survey, about 40 percent have reported investment in formal research and development and collaboration with academic institutions. Results of chi-square and t-test indicate a significant difference in business performance across R&D firms versus non-R&D firms. This study provides insight in designing policies for promoting research and development activities and their implications in business enterprises in a focused manner.


business performance, research and development, comprehension survey

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