Abstract
This research aims to analyze the impact of R&D and advertising investment on firm revenue productivity. We use the data from the TEJ database and focus on the public listed manufacturing firms in Taiwan during the period from 2000 to 2014. The manufacturing sector is divided into two categories of traditional and non-traditional. Based on past studies, we find that R&D and advertising investment have a positive impact on firm revenue productivity. In this research, the model is separated into theoretical model and empirical model. First, we use proxy variable and OLS to estimate the coefficient of revenue function. Next, according to revenue productivity evolution function, we use NLLS to estimate the influence of R&D and advertising investment on firm revenue productivity. Furthermore, revenue productivity evolution function is extended to be four parts, including firm size, firm age, exporting sales and intermediate goods or final goods. The empirical results demonstrate that firms can improve their revenue productivity through R&D but not advertising investments.