Abstract
Using a panel of Taiwan manufacturing firms over the period 2000-2015, we explore the links among firms’financial health, their R&D participation decisions,and the level of R&D investment.First,We find that financial health has significantly positive influence on firm’s decisions on R&D participation and the level of R&D investment. However, financial health has no significant influence on decisions to invest in R&D in low-tech industries.On average,high productivity firms are likely to invest more in R&D.Finally, export market participation decisions and foreign direct investment(FDI) will reduce the effect of financial health on firm R&D investment.