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Can I read R&D investments in response to performance feedback: moderating effects of firm risk profile and business strategy on EtoBox?
R&D investments in response to performance feedback: moderating effects of firm risk profile and business strategy by Oveis Madadian; Maud Van den Broeke is a Economics, Econometrics and Finance article available to read on EtoBox.
What is R&D investments in response to performance feedback: moderating effects of firm risk profile and business strategy about?
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).
Who reads R&D investments in response to performance feedback: moderating effects of firm risk profile and business strategy?
It is typically read by researchers, students, and practitioners in Economics, Econometrics and Finance.
- Author
- Oveis Madadian; Maud Van den Broeke
- Publisher
- Informa UK Limited
- Published
- 2022
- Language
- EN
- Field
- Economics, Econometrics and Finance (Social Sciences)