R&D investments in response to performance ...
Document type :
Compte-rendu et recension critique d'ouvrage
Title :
R&D investments in response to performance feedback: moderating effects of firm risk profile and business strategy
Author(s) :
Madadian, Oveis [Auteur]
Lille économie management - UMR 9221 [LEM]
Van Den Broeke, Maud [Auteur]
Lille économie management - UMR 9221 [LEM]
Lille économie management - UMR 9221 [LEM]
Van Den Broeke, Maud [Auteur]
Lille économie management - UMR 9221 [LEM]
Journal title :
Applied Economics
Pages :
802-822
Publisher :
Taylor & Francis (Routledge)
Publication date :
2023-02-07
ISSN :
0003-6846
English keyword(s) :
Behavioral theory of the firm
performance feedback
R&D
risk profile
business strategy
performance feedback
R&D
risk profile
business strategy
HAL domain(s) :
Sciences de l'Homme et Société/Gestion et management
English abstract : [en]
R&D investments in response to performance feedback have been extensively studied. We show that both firm risk profile (i.e. low vs high risk) and business strategy (i.e. Prospector vs Defender), two aspects understudied ...
Show more >R&D investments in response to performance feedback have been extensively studied. We show that both firm risk profile (i.e. low vs high risk) and business strategy (i.e. Prospector vs Defender), two aspects understudied in this context, have incremental moderating effects (both separate and joint) on this R&D-performance feedback relationship. Using a sample of US listed firms from 2000 to 2019, we observe that, when performance relative to aspiration level decreases (increases), without controlling for moderating effects of risk and strategy, firms tend to increase (decrease) R&D investments. However, as risk profile changes from low to high risk, responses to performance feedback tend to change from decreasing R&D or maintaining status quo to increasing R&D investments. We also find that, in response to performance deviation from aspiration level (regardless of the direction), Defenders tend to decrease R&D investments, regardless of risk profile, whereas Prospectors tend to increase R&D investments (maintain status quo) when their performance relative to aspiration level decreases (increases).Show less >
Show more >R&D investments in response to performance feedback have been extensively studied. We show that both firm risk profile (i.e. low vs high risk) and business strategy (i.e. Prospector vs Defender), two aspects understudied in this context, have incremental moderating effects (both separate and joint) on this R&D-performance feedback relationship. Using a sample of US listed firms from 2000 to 2019, we observe that, when performance relative to aspiration level decreases (increases), without controlling for moderating effects of risk and strategy, firms tend to increase (decrease) R&D investments. However, as risk profile changes from low to high risk, responses to performance feedback tend to change from decreasing R&D or maintaining status quo to increasing R&D investments. We also find that, in response to performance deviation from aspiration level (regardless of the direction), Defenders tend to decrease R&D investments, regardless of risk profile, whereas Prospectors tend to increase R&D investments (maintain status quo) when their performance relative to aspiration level decreases (increases).Show less >
Language :
Anglais
Popular science :
Non
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