Firm R&D Behavior and Evolving Technology in Established Industries
Organization Science, Forthcoming
42 Pages Posted: 25 May 2008 Last revised: 29 Oct 2012
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
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