Abstract:

This research aimed to investigate the extent to which Jordan industrial companies invest in research and development and the impact of this investment on performance of these companies. The study also aimed to explore the impact of company characteristics; size, age and capital, on the relationship between investment in research and development and financial performance of these companies. 

The study relied on measuring investment in research and development through expenses on research and development as a percentage from sales and number of employees working in this field. The annual financial statements for the period 2010-2016 of the participating companies were consulted to obtain the data needed. As for the financial performance, the study used three indicators, namely return on assets, return on equity and earnings per share. 

Results indicate that the level of investment in research and development by Industrial companies in Jordan is very low compared to international standards. It was .0079 in 2017, which is far below the international average which reached 4.1% in 2017. Results also showed no significant relationships between investment in research and development and financial performance of the participating companies. Finally, results pointed out that the characteristics of firms did not change this relationship.

The research concluded with some conclusions and recommendations in light of the results.