Business type, industry value chain, and R&D performance: Evidence from high-tech firms in an emerging market

Hsiao Wen Wang, Ming Cheng Wu

Research output: Contribution to journalArticlepeer-review

17 Scopus citations

Abstract

This study focuses on how the business type and technological learning mode, which a high-tech firm chooses based on its core competence, influence the firm's R&D strategies, which in turn affect firm performance. This study also explores how the interaction between a firm's business type and industry value chain stage affects the relationship between R&D investments and operating performance. We suggest that the linkage of R&D investments and operating performance will increase gradually, when firms move from contract manufacturing to own brand business. R&D investments can contribute more to performance when firms adopt the hybrid business type. Furthermore, R&D investments generate more significant benefits for the own brand companies than the contract manufacturers at the same stage of the industry value chain. R&D investments of the downstream contract manufacturers have a negative impact on firm performance. Regardless of business type, firms in the upstream (midstream) stage of the industry value chain outperform downstream stage firms in deriving benefits from R&D activities. Finally, the lagged effects of R&D investments on operating performance are affected by the interaction between business type and industry value chain.

Original languageEnglish
Pages (from-to)326-340
Number of pages15
JournalTechnological Forecasting and Social Change
Volume79
Issue number2
DOIs
StatePublished - Feb 2012

Keywords

  • Core competence
  • Industry value chain
  • OBM
  • ODM/OEM
  • R&D performance
  • Technological learning

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