Unraveling the impact of R&D investment on corporate growth: Empirical insights on intensity- and growth rate-based differences

• This paper investigates R&D investment and corporate growth with additive quantile models combined with a two-stage instrumental variable approach. • R&D investment promotes firm growth in the short term only at very high intensities. • Extensive R&D investment can revive the growth of declining firms. This paper examines intensity- and speed-based differences in the short-term relationship between R&D investment and corporate growth of over 2,000 high-tech firms from 2000 to 2020 using semiparametric quantile models. Although R&D investment is often assumed to be a candidate supporting the recovery of declining firms, a positive impact has yet only been revealed for high-growth firms. This study finds that this effect is only positive at high intensities, roughly above a 50 % R&D-to-sales ratio, and that the threshold is higher for declining firms, at about 130 %. These findings contribute to the understanding of the relationship and are valuable for managers as they consider R&D investments to enhance corporate growth.