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R&D investment, firm performance and moderating role of system and safeguard: Evidence from emerging markets.

Alam, A., Uddin, M., Yazdifar, H., Shafique, S. and Lartey, T., 2019. R&D investment, firm performance and moderating role of system and safeguard: Evidence from emerging markets. Journal of Business Research, 106 (January), 94 - 105.

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DOI: 10.1016/j.jbusres.2019.09.018

Abstract

© 2019 Elsevier Inc. The relationship between R&D and firm performance is highly dependent on the external environment. Therefore, this paper examined the effects of country level investor protection (safeguards) and governance mechanisms (systems) on the relationship between R&D and firm performance. Using GMM estimation and elasticity testing of panel data for 423 firms from 12 emerging countries, we find that a country's safeguards tend to moderate the relationship between R&D and firm performance more than the system of a country. The results indicate that safeguarding is relatively more important for the relationship between R&D and firm performance than other country level governance mechanisms, as the former can easily attract outside capital when it is strong. These results have significant implications for innovation policy. In particular, managers may wish to strengthen investor protection to promote high R&D investment in order to increase firm performance.

Item Type:Article
ISSN:0148-2963
Uncontrolled Keywords:R&D investment; System, Safeguard; Emerging markets
Group:Faculty of Management
ID Code:33692
Deposited By: Unnamed user with email symplectic@symplectic
Deposited On:09 Mar 2020 16:32
Last Modified:09 Mar 2020 16:32

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