Does research pay?

In order to develop or protect competitive advantages companies besides other initiatives increasingly invest more and more in research and development (R&D) to foster innovation and dynamic capabilities. Consequently discussions about the effectiveness and benefit of R&D expenditure have become popular in the recent years.This paper is dealing with the topic Does research pay? An analysis of R&D expenditure and economic performance in small and medium-sized enterprises (SME). It was written in the second semester on the module of Research Methods to obtain a Master of Business Administration. In the first part the theoretical basis for innovation management calculation of benefit evaluation methods of R&D initiatives in companies are given. The second part presents a quantitative analysis of the efficacy of R&D expenditure and economic performance of SME based on a data set produced from the Statistisches Bundesamt Germany by using MS Excel and the programming language R. Finally this assignment provides a summary an outlook and a recommendation for further research.