Do R&D expenditures matter more than those of marketing to company performance? The moderating role of industry characteristics and investment density

Ping Chuan Chen, Wu Chiang Chan, Shiu Wan Hung, Yi Jung Hsiang, Li Chang Wu

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

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.

Original languageEnglish
Pages (from-to)205-216
Number of pages12
JournalTechnology Analysis and Strategic Management
Volume28
Issue number2
DOIs
StatePublished - 7 Feb 2016

Keywords

  • firm performance
  • industry characteristics
  • investment density
  • marketing expenditure
  • Research and development expenditure

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