Balancing Internal and External R&D Strategies to Improve Innovation and Financial Performance
This research investigated the complementarity of internal and external R&D for innovation development and the effect of innovation on the financial performance of European manufacturing firms. Using multigroup structural equation modeling, this study partially supported that internal and extern...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Associação Nacional de Pós-Graduação e Pesquisa em Administração (ANPAD)
2018-07-01
|
| Series: | BAR: Brazilian Administration Review |
| Subjects: | |
| Online Access: | http://www.scielo.br/pdf/bar/v15n2/1807-7692-bar-15-02-e170129.pdf |
| _version_ | 1828079474407636992 |
|---|---|
| author | Fábio de Oliveira Paula Jorge Ferreira da Silva |
| author_facet | Fábio de Oliveira Paula Jorge Ferreira da Silva |
| author_sort | Fábio de Oliveira Paula |
| collection | DOAJ |
| description | This research investigated the complementarity of internal and external R&D for innovation development and the effect of innovation on the financial performance of European manufacturing firms. Using multigroup structural equation modeling, this study partially supported that internal and external R&D are complementary in firms from high-technology industries, whereas they are not in firms from low-technology industries. For the two groups of firms, both internal and external R&D separately had a positive effect on innovation performance. These results suggested that if low-tech firms, which had lower absorptive capacity than high-tech firms, want to improve their innovation performance in the long term, they should start prioritizing internal R&D to improve their absorptive capacity while achieving a short-term satisfactory innovation outcome. As absorptive capacity rises, more complex strategies balancing internal and external R&D should be adopted. Contrary to expectations, the empirical analysis indicated that innovation performance did not influence short-term financial performance for the whole sample. However, in countries more affected by the 2008 crisis (for instance, Baltic countries, Portugal and Spain), this effect was detected, indicating that innovation helped firms to recover faster. |
| first_indexed | 2024-04-11T03:01:54Z |
| format | Article |
| id | doaj.art-879e51579776476985b1be80070e5fd6 |
| institution | Directory Open Access Journal |
| issn | 1807-7692 |
| language | English |
| last_indexed | 2024-04-11T03:01:54Z |
| publishDate | 2018-07-01 |
| publisher | Associação Nacional de Pós-Graduação e Pesquisa em Administração (ANPAD) |
| record_format | Article |
| series | BAR: Brazilian Administration Review |
| spelling | doaj.art-879e51579776476985b1be80070e5fd62023-01-02T13:59:16ZengAssociação Nacional de Pós-Graduação e Pesquisa em Administração (ANPAD)BAR: Brazilian Administration Review1807-76922018-07-01152e17012910.1590/1807-7692bar2018170129Balancing Internal and External R&D Strategies to Improve Innovation and Financial PerformanceFábio de Oliveira Paula0Jorge Ferreira da Silva1Pontifícia Universidade Católica do Rio de Janeiro, BrazilPontifícia Universidade Católica do Rio de Janeiro, BrazilThis research investigated the complementarity of internal and external R&D for innovation development and the effect of innovation on the financial performance of European manufacturing firms. Using multigroup structural equation modeling, this study partially supported that internal and external R&D are complementary in firms from high-technology industries, whereas they are not in firms from low-technology industries. For the two groups of firms, both internal and external R&D separately had a positive effect on innovation performance. These results suggested that if low-tech firms, which had lower absorptive capacity than high-tech firms, want to improve their innovation performance in the long term, they should start prioritizing internal R&D to improve their absorptive capacity while achieving a short-term satisfactory innovation outcome. As absorptive capacity rises, more complex strategies balancing internal and external R&D should be adopted. Contrary to expectations, the empirical analysis indicated that innovation performance did not influence short-term financial performance for the whole sample. However, in countries more affected by the 2008 crisis (for instance, Baltic countries, Portugal and Spain), this effect was detected, indicating that innovation helped firms to recover faster.http://www.scielo.br/pdf/bar/v15n2/1807-7692-bar-15-02-e170129.pdfinnovation performanceinternal R&Dexternal R&Dfinancial performancemanufacturing firms |
| spellingShingle | Fábio de Oliveira Paula Jorge Ferreira da Silva Balancing Internal and External R&D Strategies to Improve Innovation and Financial Performance BAR: Brazilian Administration Review innovation performance internal R&D external R&D financial performance manufacturing firms |
| title | Balancing Internal and External R&D Strategies to Improve Innovation and Financial Performance |
| title_full | Balancing Internal and External R&D Strategies to Improve Innovation and Financial Performance |
| title_fullStr | Balancing Internal and External R&D Strategies to Improve Innovation and Financial Performance |
| title_full_unstemmed | Balancing Internal and External R&D Strategies to Improve Innovation and Financial Performance |
| title_short | Balancing Internal and External R&D Strategies to Improve Innovation and Financial Performance |
| title_sort | balancing internal and external r d strategies to improve innovation and financial performance |
| topic | innovation performance internal R&D external R&D financial performance manufacturing firms |
| url | http://www.scielo.br/pdf/bar/v15n2/1807-7692-bar-15-02-e170129.pdf |
| work_keys_str_mv | AT fabiodeoliveirapaula balancinginternalandexternalrdstrategiestoimproveinnovationandfinancialperformance AT jorgeferreiradasilva balancinginternalandexternalrdstrategiestoimproveinnovationandfinancialperformance |