Firm R&D Behavior and Evolving Technology in Established Industries

Organization Science, Forthcoming

Ross School of Business Paper No. 1109

42 Pages Posted: 25 May 2008 Last revised: 12 Jun 2014

See all articles by Anne Marie Knott

Anne Marie Knott

Washington University in St. Louis - John M. Olin Business School

Hart E. Posen

University of Wisconsin-Madison

Date Written: 2009

Abstract

One of the key mechanisms of firms' strategic renewal is R&D, and a key driver of the intensity of R&D is industry context. A number of theories develop propositions linking industry factors to firm R&D behavior, but these theories lack consensus. To date empirical tests have been unable to resolve the competing predictions due to lack of time-varying measures of technology. We create new measures for technology then conduct a test of the competing theories. Our results indicate that the data best match a model of innovative behavior in which firms invest in R&D principally to regain eroded advantage rather than to pursue the new frontier.

Keywords: R&D, Innovation, Strategic Renewal, Industry Evolution

Suggested Citation

Knott, Anne Marie and Posen, Hart E., Firm R&D Behavior and Evolving Technology in Established Industries (2009). Organization Science, Forthcoming; Ross School of Business Paper No. 1109. Available at SSRN: https://ssrn.com/abstract=1137148

Anne Marie Knott (Contact Author)

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1156
St. Louis, MO 63130-4899
United States

Hart E. Posen

University of Wisconsin-Madison ( email )

Madison, WI
United States

HOME PAGE: http://bus.wisc.edu/faculty/hart-posen

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