Abstract
This study investigates whether being an innovator improves the effectiveness of R&D spending in the financial market. Prior studies have shown that a firm's R&D has a positive effect on its performance in the financial market, while there are mixed results on the impact of being an innovator in the financial market performance. Using a unique dataset of the innovation, we report evidence that being an innovator has a significant positive impact on the effectiveness of its R&D success. In particular, we find a positive and significant coefficient on the interaction term between R&D and innovation. The results indicate that firms tend to enjoy higher financial market performance in the future, as their R&D spending increases and they are innovators in the market. This study contributes to the literature by showing empirical evidence that the effectiveness of R&D increases as firms being more innovative.
Original language | English |
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Pages (from-to) | 4981-4988 |
Number of pages | 8 |
Journal | Information (Japan) |
Volume | 19 |
Issue number | 11 |
State | Published - Nov 2016 |
Keywords
- Financial performance
- First mover advantage
- Product innovation
- R&D spending