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How do competitors and partners shape corporate R&D investments

How do competitors and partners shape corporate R&D investments Strategy management alludes to the organizational and environmental factors that shape firms’ propensities to make research and development (R&D) investments. We complement this literature by building on vicarious learning to explain how a firm determines its own R&D investment level based on the R&D investment patterns of partners and competitors. Using panel data on firms publicly traded in China, we show an inverted U-shaped relationship between a firm’s R&D investment pattern and the R&D investment patterns of its partners and competitors. Convergence is driven by imitation and legitimation while divergence is explained by risk perception. We conclude that competitors represent a more valuable reference than partners. Our findings advance research on vicarious learning and the antecedents of R&D investments, underscoring the role of interdependence in influencing firms’ R&D investment decisions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Technology Transfer Springer Journals

How do competitors and partners shape corporate R&D investments

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References (72)

Publisher
Springer Journals
Copyright
Copyright © The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2022
ISSN
0892-9912
eISSN
1573-7047
DOI
10.1007/s10961-022-09942-0
Publisher site
See Article on Publisher Site

Abstract

Strategy management alludes to the organizational and environmental factors that shape firms’ propensities to make research and development (R&D) investments. We complement this literature by building on vicarious learning to explain how a firm determines its own R&D investment level based on the R&D investment patterns of partners and competitors. Using panel data on firms publicly traded in China, we show an inverted U-shaped relationship between a firm’s R&D investment pattern and the R&D investment patterns of its partners and competitors. Convergence is driven by imitation and legitimation while divergence is explained by risk perception. We conclude that competitors represent a more valuable reference than partners. Our findings advance research on vicarious learning and the antecedents of R&D investments, underscoring the role of interdependence in influencing firms’ R&D investment decisions.

Journal

The Journal of Technology TransferSpringer Journals

Published: Jun 1, 2023

Keywords: R&D investments; Partners’ and competitors’ R&D investments; Vicarious learning; O32

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