Determinants and Persistence of Research and Development Investments Evidence from Malaysia

International Journal of Emerging Markets, Vol. 4 No. 3, pp. 275-292, 2009

18 Pages Posted: 16 Oct 2012

See all articles by Radiah Othman

Radiah Othman

Massey University

Rashid Ameer

IPU New Zealand Tertairy Institute

Date Written: 2009

Abstract

Purpose – The purpose of this paper is to investigate the determinants and persistence of research and development (R&D) investments in Malaysia.

Design/methodology/approach – The approach involves a regression analysis.

Findings – The regression analysis shows that lagged absorbed slack defined as the ratio of selling and administrative expenses to total sales and sales growth have positive affect on the R&D expenses, whereas diversification has negative impact on R&D expenses after controlling for leverage and profitability of the firms. Persistence in the firm-level R&D expenses is found. Occasional tendency among firms to cut down R&D spending over the period of 2000-2005 is found.

Research limitations/implications – Sample size is a limitation.

Practical implications – The findings have implications for the corporate governance and innovation charter of the firms.

Originality/value – The paper provides useful information from Malaysia regarding the determinants and persistence of R&D investments.

Keywords: Research and development, Chief executives, Stock options, Malaysia

Suggested Citation

Othman, Radiah and Ameer, Rashid, Determinants and Persistence of Research and Development Investments Evidence from Malaysia (2009). International Journal of Emerging Markets, Vol. 4 No. 3, pp. 275-292, 2009, Available at SSRN: https://ssrn.com/abstract=2162180

Radiah Othman (Contact Author)

Massey University ( email )

School of Accountancy
Palmerston North
New Zealand

Rashid Ameer

IPU New Zealand Tertairy Institute ( email )

57 Aokautere Drive
Fitzherbert
Palmerston north
New Zealand

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