SUMMARY
The aim of this study was to investigate the effect of competition in the market and the cost of research and development (R & D) on the company's stock returns. The study in terms of the relationship between variables is causal, and in terms of the goal is applied and descriptive survey in which to approve or reject hypnosis, historic data and statistical methods were used.To test the hypothesis of this study, panel data is used to estimate the model. The population was data from 102 companies over the years 2009 to 2014. In this study, descriptive and inferential methods were used to analyze the data. This research is done using causal-comparative approach.In descriptive level, using statistical characteristics general characteristics are described and in inferential level in order to respond to hypotheses and to find a special relationship between the variables regression analysis tests, T-test and F-test were used. In addition, to test the hypotheses of Eviews 9 statistical software was used. The results showed that the first and second hypothesis, research and development expenses and market competition of product with stock returns were approved. The third hypothesis was not approved: there is no significant relationship between R & D expenses and stock returns in companies with high competition.