Increasing marginal returns: Evolving impacts of R&D expenditures on future profitability in Taiwan

Chuan‐San Wang and Che‐Yu Lin

Pacific Economic Review, 2025, vol. 30, issue 2-3, 150-172

Abstract: This study explores the evolving impact of R&D expenditures on the profitability of Taiwanese firms, particularly in high‐tech sectors such as semiconductors and electronics. The findings highlight the increasing marginal returns from R&D investments, revealing that as firms intensify their R&D efforts, the incremental gains in profitability become more pronounced. Moreover, shifts in sample composition further reinforce this trend, highlighting the strategic importance of R&D in driving long‐term profitability.

Date: 2025
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