There are systematic long-run differences in performance between firms related to their R&Dstrategy. Controlling for unobservable heterogeneity, past performance and other firm characteristics, this paper shows a causal effect from R&D-engagement to firm-performance. The effect is positive and significant in both level and growth dimension. On average, firms with persistent R&D commitment have 13 percent higher labour productivity than non-R&D firms, and 9 percent higher productivity than firms which make occasionally R&D efforts, controlling for differences in past labour productivity. Furthermore, a persistent R&D-strategy corresponds to 1.4 percent higher growth rate in productivity. The results are similar when firm performance is measured as total sales and exports.