Balancing Internal and External R&D Strategies to Improve Innovation and Financial Performance
Journal Title: BAR: Brazilian Administration Review - Year 2018, Vol 15, Issue 2
Abstract
This research investigated the complementarity of internal and external R&D for innovation development and the effect of innovation on the financial performance of European manufacturing firms. Using multigroup structural equation modeling, this study partially supported that internal and external R&D are complementary in firms from high-technology industries, whereas they are not in firms from low-technology industries. For the two groups of firms, both internal and external R&D separately had a positive effect on innovation performance. These results suggested that if low-tech firms, which had lower absorptive capacity than high-tech firms, want to improve their innovation performance in the long term, they should start prioritizing internal R&D to improve their absorptive capacity while achieving a short-term satisfactory innovation outcome. As absorptive capacity rises, more complex strategies balancing internal and external R&D should be adopted. Contrary to expectations, the empirical analysis indicated that innovation performance did not influence short-term financial performance for the whole sample. However, in countries more affected by the 2008 crisis (for instance, Baltic countries, Portugal and Spain), this effect was detected, indicating that innovation helped firms to recover faster.
Authors and Affiliations
Paula, Fábio de Oliveira; Silva, Jorge Ferreira da
Keywords
Related Articles
- EP ID EP40666
- DOI http://dx.doi.org/10.1590/1807-7692bar2018170129
- Views 254
- Downloads 0
Career Profiles of Generation Y and Their Potential Influencers
This study aims to identify the predominant career profiles among Generation Y in Brazil and investigate the influence of demographic and professional characteristics in these profiles. Career profiles are defined as c...
Empirical Evidence of Trade Credit Uses of Brazilian Publicly‐Listed Companies
While trade credit may be used as a substitute for bank loans, we find empirical evidence that listed firms do use bank debt and trade credit as two complementary sources of financing in line with recent theoretical pap...
The Role of Experiential Knowledge and Subsequent Investment Decisions on the Profitability of Japanese Companies in Brazil
This study attempts to empirically investigate how firms’ experiential knowledge and the decision to invest sequentially in the host country are associated with the performance of their overseas subsidiaries. This resea...
Relationships between Learning, Context and Competency: a Multilevel Study
This study aims to identify the predictor variables for three types of management competencies: financial business management, process management and socio-environmental management. It was hypothesized that attributes...
The Impact of Credit Rating Changes in Latin American Stock Markets
Our objective is to examine whether a rating change or Credit Watch announcement has a significant impact on Latin American stock prices. We conducted an event study to analyze stock market reaction to such news in the...