R&D expenditures, ultimate ownership and future performance: Evidence from China

Wang Ruiqi, Fangjun Wang, Luying Xu and Changhong Yuan

Journal of Business Research, 2017, vol. 71, issue C, 47-54

Abstract: This study examines the relationship between R&D expenditures and future performance, as well as the moderating effects of ultimate ownership on the relationship. Using a sample of 772 Chinese listed firms from 2007 to 2012, this study shows that R&D expenditures are positively related to firms' future performance and that the R&D expenditures of SOEs lead to better future performance than those of non-SOEs. In addition, the results also reveal that voting rights of ultimate owners positively moderate the R&D-performance relationship. We also adopt fuzzy-set Qualitative Comparative Analysis (fsQCA) to reveal the interdependent and interrelated nature of the explanatory predictors of future performance. The results of fsQCA further indicate that large-sized SOEs with concentrated ownership could attain higher future performance on R&D investments if there are more patent applications and capital and operating spending. These findings complement the R&D performance literature by simultaneously considering the combinatory effect of ultimate ownership and control ability.

Keywords: R&D expenditures; Ultimate ownership; Voting rights; Future performance; Fuzzy-set Qualitative Comparative Analysis (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:71:y:2017:i:c:p:47-54

DOI: 10.1016/j.jbusres.2016.10.018

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