R&D investment management and ambidextrous technological innovation: Evidence from Chinese listed firms

Duan Liu, Yuntian Jiang, Qianzhen Zhou and Shujie Yao

International Review of Economics & Finance, 2023, vol. 88, issue C, 843-860

Abstract: Firm-level technological innovation is in part driven by R&D management motivation. This paper studies the effect of Chinese listed firms’ R&D investment management on their ambidextrous technological innovation performance. In the prospective of internal financial constraints and earnings management, three R&D motivations are identified: strategically proactive intervention, resource-constrained passive adjustment, and R&D manipulation for earnings purposes. Based on the Chinese listed firm level data during 2007–2019, this paper analyzes the effects of these three different R&D management motivations on the ambidextrous innovation patent portfolio, cutting-edge innovation possibility and patent diversification. The empirical results reveal that R&D management significantly promotes ambidextrous innovation, particularly exploration innovation. Firms with more internal financial resources are more likely to engage in proactive R&D activities than those with less financial resources who are more likely to place earnings before R&D investment as the top priority. A robustness test that controls for the 2008 financial crisis also verifies our results.

Keywords: R&D management; Earnings manipulation; Ambidextrous innovation; Patent diversification (search for similar items in EconPapers)
JEL-codes: D21 G32 O16 O32 O52 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:88:y:2023:i:c:p:843-860

DOI: 10.1016/j.iref.2023.07.020

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