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Factors affecting firm's R&D investment decisions

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  • Lai, Yung-Lung
  • Lin, Feng-Jyh
  • Lin, Yi-Hsin

Abstract

This study investigates the decision factors regarding R&D investment activities. The subjects in this empirical study are from the countries of Taiwan, Japan, and Korea, which are all similar in the level of regional economic development and technology manufacturing. The research samples consist of the financial statements of public companies or OTC manufacturing companies trading in the above three countries, which are from the database of Compustat and TEJ. Through a literature review, this study focuses on a discussion of seven major factors that influence the decision making underlying the R&D investment process along with treating R&D investment behavior as a function of internal resources, such as financial, tangible and intangible resources. The main objectives of this study are to understand the R&D investment strategies of the three countries, to focus on specific internal strategic resources that explore the firms' R&D investment behavior, and to provide results to determine whether company size and intangible resources (such as goodwill, patents, and human and business resources) are important factors that affect the overall decision-making process of investing in R&D activities. The findings of this paper can serve as a valuable reference in academic research and the strategic thinking behind sustainable businesses.

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  • Lai, Yung-Lung & Lin, Feng-Jyh & Lin, Yi-Hsin, 2015. "Factors affecting firm's R&D investment decisions," Journal of Business Research, Elsevier, vol. 68(4), pages 840-844.
    • Handle: RePEc:eee:jbrese:v:68:y:2015:i:4:p:840-844
    DOI: 10.1016/j.jbusres.2014.11.038
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