This study examines the effects of competitive environment on R&D costs. R&D costs are a significant expense for companies to increase their competitiveness. However, there are few previous studies related to R&D costs and competitive environment. This study examines the effect of industry competition on R&D costs. The results of this study are as follows. First, the R&D costs are high in the market with a large product differentiation strategy. The market with a high product differentiation strategy shows that R&D costs are increasing to secure competitive advantage. Second, the market with high entry barriers and R&D costs are positively related. Finally, market growth and R&D costs are positively related. This study has the following contributions. This study is significant in that it shows empirically that the expenditure level of R&D costs can be changed from the perspective of the company"s survival, focusing on the industrial level factor.