R&D or Marketing? Exploring the Resource Allocation Strategy in High-Tech Industries

Abstract

This study applies resource-based theory to examine how resource allocation influences high-tech firm performance, considering the moderating effects of resource slack, resource similarity, and resource diversification. Using 1,046 firm-year observations from Taiwan and GLS regression, findings reveal that R&D investment enhances performance, while marketing benefits from resource slack. However, resource similarity between parent and subsidiary does not significantly impact performance. Resource diversification within a business group weakens the R&D-performance link but does not affect marketing. High-tech firms with resource slack achieve better outcomes by allocating more resources to marketing rather than R&D. This study provides strategic insights into optimizing resource allocation for firm performance.

Keywords: Resource allocation strategy, Resource slack, Resource similarity, Resource diversification, High-tech firms