The key importance of spending on research and development in Formula One

Abstract

AbstractThis paper analyzes the impact of budget strategy on Formula One team success in the World Constructors Championship using data from 11 seasons (2010–2020) before the budget cap. It demonstrates that budget strategy positively affects standings, points, podium finishes, and race completion. The motivation to achieve better results is explained through success‐related returns. Cost–benefit analysis and regression models were employed, revealing a significant influence of budget strategy on team success. Investing in research and development emerges as the most effective approach to enhance the success rate.