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A comprehensive test on the impact of positive performance feedback on corporate R&D investment

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  • Wang, Kewen
  • Qiao, Yuanbo

Abstract

Divergent empirical evidence on the impact of positive performance feedback on corporate research and development (R&D) investment obtained by prior studies may be due to the possible model misspecification. In this study, theoretically, we construct an S-shaped impact of positive performance feedback on corporate R&D investment from the lenses of learning by doing and slack search mechanisms of the behavioral theory of the firm, and empirically, find strong evidence for the S shape by including the quadratic and cubic terms in the model based on the data from Chinese listed firms from 2010 to 2020.

Suggested Citation

  • Wang, Kewen & Qiao, Yuanbo, 2023. "A comprehensive test on the impact of positive performance feedback on corporate R&D investment," Finance Research Letters, Elsevier, vol. 58(PC).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pc:s1544612323008954
    DOI: 10.1016/j.frl.2023.104523
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    References listed on IDEAS

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