R&D,productivity, and market value: An empirical study from high-technology firms

Although prior research has addressed the influence of production activity and research and development (R&D) on productivity, it is not clear whether production and R&D affect the market value of a firm. This study proposes and verifies an R&D value chain framework to explore the relationship among productivity, R&D, and firm market values, as measured by Tobin's q theory. By doing so, we attempt to link new theoretical insights and empirical evidence on the effects of R&D efforts and basic production activities to the market valuations of high-technology firms. The value chain data envelopment analysis approach was proposed to estimate parallel-serial processes of basic operations and R&D efforts. This approach can be used to simultaneously estimate the profitability efficiency and marketability efficiency of high-technology firms. This area has rarely been studied, but it is particularly important for high-technology R&D policies and for further industrial development. Using the R&D value chain perspectives of model innovations and extensions proposed in several previous studies, we examined the appropriate levels of intermediate outputs. Production efficiency and R&D were combined to estimate the appropriate levels of intermediate outputs for high-technology firms. Based on the intermediate output analyses, we developed an R&D efforts decision matrix to explore and identify operational and R&D efficiency for high-technology firms. Our sample firms are displayed on a four-quadrant action grid that provides visual information on current short-term operational efficiency and decision making on long-term R&D strategic positions. The empirical findings from the R&D value chain model can provide information for policymakers and managers and suggest the adoption of various policies that place more emphasis on profitability and marketability strategies.     

Governance Structure,Innovation and Internationalization: Evidence From India

We examine the impact of firm-level governance structure on the innovation and internationalization strategies of emerging market firms. We propose that in the case of emerging market firms, governance is a response to the prevailing institutional environment and affects the innovation and internationalization strategies of firms. Based on a longitudinal sample of 16,337 firm-year observations of Indian listed firms over a year time period from 2002 to 2009, we find a positive effect of family ownership and group affiliation on R&D intensity and new foreign investments. Institutional ownership also positively affects new foreign investments, but has no effect on R&D intensity. Further, we find that R&D intensity interacts with family ownership, institutional ownership and group affiliation in affecting new foreign investments.     

Delegation,R&;D and competitiveness in a Bertrand duopoly

This paper studies the profitability of centralized investments in R&D versus decentralized price determination in a duopoly for Bertrand consumer markets. As a direct effect, R&D investments lower the firm’s production costs and thus increase c.p. the firm’s profits. However, as an indirect effect, lowering production costs causes market reactions and alters the competition between the firm and its competitors. In the extreme, aggressive competition can occur that diminish an investing firm’s profits. Delegating the price decision using an incentive contract distorts a manager’s perceived costs and induces a virtual cost increase in equilibrium. Trading off the factual cost reduction against a virtual cost increase we find that competition makes strategic delegation more attractive compared to investments in R&D. If firms are allowed to apply both strategies in combination, they concentrate on just one of them for strategic considerations.     

研发投入对企业绩效的影响研究 ——基于企业金融化水平门限回归

本文选取1435家A股上市公司2011—2018年度的面板数据,以企业金融化水平作为门限变量,研究企业研发投入对企业绩效的非线性影响关系。研究结果表明:(1)企业金融化行为给研发投入对企业绩效的促进作用带来严重的时滞效应,研发投入对当年企业绩效不存在促进作用;(2)研发投入对未来一年企业绩效有双门限效应,二者呈倒N型关系,在第二区间内研发投入促进未来一年企业绩效;研发投入对未来二年企业绩效有单门限效应,在第一区间内研发投入促进未来二年企业绩效;(3)在适度的企业金融化水平区间内,研发投入才会促进未来企业绩效。本文指出上市公司金融化水平最优区间占比分布具有区域、行业和企业性质异质性,并进一步基于实证研究结果提出了相应的政策建议,有利于企业合理管理研发投入和防止企业脱实向虚。     

R&D alliance portfolio and innovation in an emerging market: The role of business group affiliation and institutional reforms

The role of institutional factors in shaping the outcomes of research and development (R&D) alliance portfolios (APs) is underexplored in the extant literature. This study examines how institutional contingencies in an emerging market context affect the relationship between R&D AP composition (i.e., size and diversity) and firm innovation performance. This study draws on institutional perspective to suggest that business group affiliation (BGA) and institutional reforms positively moderate the relationship between R&D AP composition and innovation performance. A longitudinal empirical investigation conducted on a sample of 185 firms from Indian high-tech sectors, for the period 2003–2015, broadly supports our arguments. This study contributes to the AP and emerging markets literature by highlighting the effects of institutional contingencies of emerging markets on the outcomes of R&D APs.     

Sequencing of emphases on technology alliances and internal R&D: The effects of the market cycle

How does the market reward technological firms' emphases on alliancing and R&D strategies depending on the phase in the market cycle? I use the 1990s’ “dot-com bubble” cycle and its burst after 2000 to look for joint effects of technology alliances and internal R&D investments on firm market valuations. I show that the existing theory is incomplete without considering (1) the temporal sequencing of emphases on technology alliances and R&D, and (2) the phase in the market cycle. I show that different phases of the market cycle reward different temporal sequences of emphases on technology alliances and internal R&D. This paper contributes to the theory of complementarity of alliances and R&D by pointing out previously unexplored factors that make technology alliances and R&D investments either complements or substitutes.     

Patents,R&D investments and post-IPO strategies

This paper empirically investigates the effect of going public on the evolution of high-tech entrepreneurial firms, focussing in particular on the interaction between innovation variables and financing and investment strategies. Specifically, I confront the effects of the IPO on firms with higher R&D investments versus firms with more patents. Firms with higher R&D investments typically view the IPO as a mechanism to raise external equity, used to pursue investments and to acquire participation in other companies, whereas those with more patents raise more debt capital and invest less after the IPO, as compared to high-tech entrepreneurial firms. I suggest that a large number of patents is an index of technological maturity for high-tech ventures, even more than age and size, that helps investors to individuate firms with a lower level of risk.     

How can David orchestrate resources to enhance firm performance? A dynamic approach to coping with resource constraints

Given that the possession of abundant resources does not always guarantee superior firm performance, this study proposes a dynamic approach to enhancing firm value. Building on the resource orchestration thesis, we investigate how firms facing resource constraints enhance their capabilities over time by orchestrating resources and how this resource orchestration can play a role in improving firm performance. Using the dynamic perspective, this study identifies four resource orchestration modes, which are specified based on how a given firm dynamically allocates its resources to technology (enacted by R&D activities) and marketing (enacted by advertising activities). Accordingly, we claim that firms with resource constraints can enhance their performance by escalating or altering their resources over time. To test our hypotheses, we used a sample of 4078 small and medium-sized enterprises in manufacturing industries between 1984 and 2018. We found that focus escalation for technology positively affects firm performance, captured by Tobin's q, and that focus alternation toward either technology or market is positively related to firm performance. Finally, we discuss the theoretical and practical implications of our findings.     

Casting a Wide Net for Innovation: Mediating Effect of R&D Human and Social Capital to Unlock the Value from Alliance Portfolio Diversity

This paper examines the performance effects associated with different alliance portfolio configurations in terms of geographical location and partner type. Based on these distinctions, the authors hypothesize that more diverse alliance portfolios enable firms to gain and exploit innovation opportunities. Additionally, the mediating effects of R&D human and social capital on the R&D alliance portfolio diversity–innovation performance relationship are explored. The authors reason that the absorptive capacity of R&D intellectual capital determines a firm's potential gains from highly diverse alliance portfolios. From panel data of manufacturing firms in Spain for the period 2008–2013, the results confirm the inverted U‐shaped relationship between alliance portfolio diversity and firm innovation performance, implying that both insufficient and excessive alliance portfolio diversity may be detrimental to firm innovativeness. Additionally, R&D human and social capital partially mediates the R&D alliance diversity–innovation performance relationship, emphasizing the importance of internal capabilities to leverage the benefits of highly diverse alliance portfolios. These findings add a dynamic dimension to the conceptualization of alliance portfolios and how firms create value by balancing explorative and exploitative alliances.     

Firms' R&D Cooperation Behavior in a Supply Chain

This study investigates firms' R&D cooperation behavior in a supply chain where two firms first cooperate in R&D investments and then decide the production quantity according to a wholesale price contract. By using a concept named contribution level that measures a firm's technological contribution to the R&D cooperation in the supply chain, we show that both firms can achieve win–win via cartelization only if their contribution levels are Pareto matched, i.e., when each firm's contribution level is comparable to its partner's. When spillovers are endogenized, we further establish that an increasing spillover always benefits both firms without any R&D cooperation, but only benefits the firm whose contribution level is relatively low when under R&D cartels. Finally, we show that the path of first increasing spillovers to be perfect and then forming a cartel has a higher chance of achieving the best mode in terms of profitability.     

增长期权的执行、创造与资产风险溢价——企业生命周期的视角

增长期权的执行和创造共同推动着企业的生命周期进程，二者对资产相对构成的影响力量对比决定了资产风险溢价随企业生命周期的变化特征。本文在连续时间框架下利用实物期权方法和定价核技术，理论上揭示并比较增长期权执行和创造对资产风险溢价的影响，以及二者共同作用下资产风险溢价随企业生命周期的变化规律。结果表明：增长期权的执行和创造分别会降低和提升风险溢价，且二者分别对年轻和成熟阶段资产风险溢价的影响更大；进一步，增长期权的不断执行使得资产风险溢价随企业生命周期进程呈现下降趋势，增长期权的持续创造则可使成熟企业"再焕新生"而进入新的生命周期。     

The role of firm ownership on internationalization: evidence from two transition economies

This paper investigates how different types of owners influence the extent of firm internationalization, measured by the share of firm exports in total sales. The results of the analysis carried out using firm level data of Estonian and Slovenian firms, show that the firms under the control of the insider owners are, on average, more internationalized. State control, on the other hand, hampers internationalization efforts. Further, more productive firms, larger firms, more capital-intensive firms and those with high level of investment in both fixed capital and R&D are more successful in internationalization process. Finally, high market share also leads to increased internationalization through exports as firms seek to expand in foreign markets after having dominated the domestic ones.     

The performance evaluation of regional R&D investments in China: An application of DEA based on the first official China economic census data

R&D (Research and Development) activities represent the basic core of corporate science and technology activities, and play a crucial role in enhancing the ability of companies to achieve rapid and sustainable growth. In recent years, the total R&D investments in China have increased significantly and the proportion of the industrial investments in R&D activities relative to national R&D investments has increased rapidly. In order to investigate the effectiveness of these R&D investments, we utilize Data Envelopment Analysis (DEA) models to evaluate the relative efficiencies of 30 regional R&D investments using the First Official China Economic Census Data in 2004. Our investigation and study indicate the following: (1) Only six provinces are global technical efficient and the performance of regional R&D investments in China needs to improve dramatically. (2) Increasing returns to scale have not yet occurred in any province. Constant returns to scale have prevailed in most provinces in the Western region, and decreasing returns to scale have prevailed in most provinces in the Eastern and Central regions. (3) There are no direct relationships between global technical efficiency and the amount of R&D investment. The Western region has the highest average radial efficiency score, followed by the Eastern region, and then by the Central region. (4) The Eastern region has advantages in local technical efficiency, the Western region has advantages in scale efficiency, while the Central region has neither technical efficiency advantages nor scale efficiency advantages. Suggestions are proposed to improve efficiencies of regional R&D investments.     

The value of board monitoring in promoting R&D: a test of agency-theory in the US context

Prior agency-theory research has presented conflicting findings regarding the importance of board monitoring in motivating R&D. We reinvestigate this literature by examining the value monitoring exerts in abating both the agency costs of underinvestment and overinvestment in R&D. We argue that monitoring that relies on board independence has both benefits and costs associated with promoting R&D. While we assert that intense monitoring by the board heightens underinvestment in the US context, it can also provide discipline over a firms free cash flows. We test our theory using a longitudinal panel data set consisting of a cross-section of S&P 1500 US-firms between 1997 and 2007. On average our study finds inside directors increase overinvestment in R&D, but facilitate better resource allocation when a firm has rich growth opportunities. Also, while too much emphasis on outside directors heightens underinvestment in R&D, a more independent board encourages better resource allocation when firms have high free cash flows that need to be paid back to owners. Thus, our results suggest a more inclusive perspective of agency-theory can help managers make better R&D investment decisions.     

What effect does the aggregate industrial R&D offshoring have on you? A multilevel study

The present study argues that R&D offshoring is not only a matter of firm's decision as in previous literature, but also has an important industrial externality component. For a sample of manufacturing and services industries in the period 2005–15, I study the externalities coming from R&D offshorers in a given industry and the heterogeneous effects of enterprises' internal knowledge base characteristics. The evidence points to offshoring externality (OE) presenting an inverted U-shape with respect to the firms' innovative processes. However, firms with higher levels of human capital and/or internal R&D investments obtain higher returns coming from the OE. Overall, it seems that a strategy (R&D offshoring) that is highly beneficial for enterprises individually, might be also optimal for the Spanish economy.     

The impact of service R&D on the performance of Korean information communication technology small and medium enterprises

In recent years, research and development (R&D) in the service industry has attracted a great deal of attention from both academia and industrial firms. However, compared to the manufacturing sector, little research exists on the implications of R&D for the financial and/or non-financial performance of firms in the service industry. The purpose of this study is to examine the impact of service R&D on the performance of information communication technology (ICT) firms. We identify five categories of R&D activities and investigate their impact on the financial and non-financial performance of 100 ICT firms, with a focus on small and medium enterprises (SMEs) in South Korea. We postulate positive relationships between R&D efforts and a firm's performance. However, the findings only partially support our hypotheses; unexpected results demonstrate that the presence of R&D management negatively influences a firm's performance. We present detailed statistical results and discuss the implications of the study.     

The role of political ties and political uncertainty in corporate innovation

We examine the relationship between firms' political connections and corporate innovation in a European context. We also consider the moderating effect of political connections on the relationship between political uncertainty and firms' innovation. We use two different metrics of innovation: R&D (an input measure), and patent counts (an output measure). We find that firms with former politicians on their board of directors invest less in R&D than their counterpart firms. However, the presence of this type of director on the board is positively associated with the number of a firm's patent applications. It seems that, although political ties reduce the amount of resources devoted to R&D activities, they increase the effectiveness of intellectual rights protection. Results also show that political uncertainty decreases R&D investment but exacerbates the need for legal protection of innovation through patents. According to our results, political connections attenuate the effect of political uncertainty on firm innovation such that the negative (positive) effect of uncertainty on R&D intensity (patents) weakens when the firm is politically connected.     

Institutionelle Determinanten von F&E-Investitionen

Utilizing country level data we demonstrate that a strong degree of investor protection can mitigate both asymmetric-information and agency problems that come along with R&D financing. Accordingly, we find that a higher degree of investor protection is associated with higher R&D investments. Moreover, for a sample of Austrian listed firms, we are able to show that ownership identities are significant drivers of R&D investments.     

Within-cluster determinants of output efficiency of R&D in the space industry

Dynamic slacks-based data envelopment analysis is applied to measure output performance efficiency of space R&D active private firms. Fractional logit panel analysis is used to identify associations between this firm level R&D output efficiency and space industry level R&D specialisation, presence of anchor firms, and public R&D capacity within geographical clusters.Primary data collected for the entire population of space R&D active firms in Belgium for the period 2011–2015 reveals that an environment specialized in the focus firm's space activities exerts a positive influence on R&D output efficiency. The public space R&D capacity and the presence of space anchor firms within the cluster do not influence R&D output efficiency. Firm age, a mixture of space and non-space R&D, and larger amounts of public funding positively affect R&D output efficiency. These findings should be seen in a context of a space industry dominated by SMEs and in a five year time-span.     

债务约束下的企业广告与R&D投资研究

本文以Brander和Lewis的资本结构产业组织理论为基础,结合资本市场与产品市场,分析了企业负债与广告投资、R&D投资之间的关系。通过模型推导提出理论命题,并运用我国沪深两市A股上市公司数据进行验证得到相关结论。研究结果显示负债对企业广告投入存在刺激作用而对R&D投资存在抑制效应。企业广告投入与R&D投入行为存在明显的行业差异,制造业企业两种投入相对均衡,非制造业企业通常偏好于二者之一。企业广告与R&D投入之间相互影响,制造业两种投资之间存在互补关系,而非制造业两种投资之间存在替代关系。负债对企业广告与R&D投资行为的影响存在差异,并且不同债务类型的影响同样存在差异。本研究可进一步促进资本结构产业组织理论的发展,同时为企业改善广告与R&D投资策略提供理论和经验依据。