A Study on the Correlation between R&D Investment and Financial Performance: A Case of the Chinese Automobile Manufacturing Industry

Under the background of economic globalization, China's manufacturing industry has always been one of the pillar industries of the national economy. The automobile manufacturing industry occupies a dominant position in the manufacturing industry. With the economic growth and improvement, the living standard of the population, people's demand for automobiles has gradually increased. Coupled with the current economic and social comprehensive green transformation and upgrading, for the automobile manufacturing industry, increasing R&D investment will help enterprises occupy the market and improve their financial performance. Therefore, this paper selects 64 Chinese A-share listed automobile manufacturers, with 320 samples. It uses Stata software to analyze the data of the relationship between R&D investment and various indicators. The empirical results show a negative correlation between R&D investment and the current financial performance of the automobile manufacturing industry. There is a lagging effect of R&D investment on the current financial performance of automobile manufacturing industry due to the existence of certain time problems with R&D projects. The negative impact of lag of period and a lag of two periods have a weakening trend. By studying and analyzing the data, it is hoped that suggestions related to R&D investment can be provided to the automobile manufacturing industry to promote the sustainable development of the enterprise.