Do R&D expenditures matter more than those of marketing to company performance? The moderating role of industry characteristics and investment density. Issue 2 (7th February 2016)

• Record Type: Journal Article
• Authors: Chen, Ping-Chuan; Chan, Wu-Chiang; Hung, Shiu-Wan; Hsiang, Yi-Jung; Wu, Li-Chang
• Is Part Of: Technology analysis & strategic management. Volume 28:Issue 2(2016)
• Page Start: 205
• Page End: 216
• Publication Date: 2016-02-07
• Subjects: Research and development expenditure -- marketing expenditure -- firm performance -- industry characteristics -- investment density; Technological innovations -- Management -- Periodicals; Research, Industrial -- Management -- Periodicals; High technology industries -- Management -- Periodicals; Strategic planning -- Periodicals; 658.401205
• DOI: 10.1080/09537325.2015.1093107
• Languages: English
• ISSNs: 0953-7325

Abstract

ABSTRACT: Confronting competitive environment, enterprises differentiate their product by promoting their R&D or marketing capacities. Scholars have verified that there is a direct relationship and a deferred effect between R&D expenditures and firm performance, but that there exists an inconsistency between marketing expenditures and firm performance. However, previous studies have neglected to analyse and compare the impact of corporate R&D and marketing investment on performance, and also ignored the moderating effects of different industry characteristics and investment densities. The study attempts to fill the gap by constructing a model to accommodate all these factors. The empirical results indicate that R&D and marketing expenditures have a positive impact on enterprise operating performance, and that there is a longer deferred effect in R&D expenditures than in marketing expenditures. By investing in R&D expenditures, manufacturing enterprises can increase their performance more than in service enterprises, and electronic enterprises can improve their performance compared with other types of firms. Finally, investments with higher R&D density can result in a higher performance.