Family control, R&D expenses and firm efficiency: evidence from Taiwanese cultural and creative industries

Qian Long Kweh, Hanh Thi My Le, Irene Wei Kiong Ting and Wen-Min Lu

International Journal of Emerging Markets, 2023, vol. 20, issue 1, 278-298

Abstract: Purpose - First, this study assesses the link between research and development (R&D) expenses and firm efficiency. Second, this study explores how family control moderates the link between the two. Design/methodology/approach - This study uses two measures of time-based firm efficiency, namely, a window slacks-based measure (WSBM) and a window epsilon-based measure (WEBM) of data envelopment analysis (DEA). Then, 216 firm-year observations are analyzed in the Taiwanese cultural and creative industries from 2005 to 2017. Findings - This study finds that R&D expenses significantly worsen firm efficiency, and that family control positively moderates this effect. A further test separating the sample into family-controlled and nonfamily-controlled firms indicates that R&D expenses negatively affect the efficiency of nonfamily-controlled firms but positively affect that of family-controlled firms. Research limitations/implications - The existing literature has examined the link between R&D expenses and corporate performance. However, the process by which R&D expenses affect corporate performance from a production perspective remains unknown. Originality/value - Overall, this study provides insights for policymakers to scrutinize resource management and R&D expenses from the production and resource-based perspectives.

Keywords: R&D expenses; Firm efficiency; Family control; Data envelopment analysis; Culturaland creative industries (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoemp:ijoem-11-2020-1291

DOI: 10.1108/IJOEM-11-2020-1291

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