The role of reference point in CEO restricted stock and its impact on R&amp;D intensity in high‐technology firms

Lim, Elizabeth

doi:10.1002/smj.2252

Cited by 101 publications

(73 citation statements)

References 75 publications

(162 reference statements)

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“…At the industry level, we control for industry productivity as measured by the sales/employees ratio. Industry productivity may be related to the firm's tendency to undertake R&D projects (e.g., Lim, ; Zhou & Wu, ). Finally, we include year dummies in order to control for changes in our dependent variable that are related to the macro environment (Chen, ).…”

Section: Methodsmentioning

confidence: 99%

“…In order to avoid biases in parameter estimates, it is important to take this into account in the regressions. Therefore, similar to prior studies that explain R&D expenses (e.g., Lim, ; Vissa, Greve, & Chen, ), we use Arellano‐Bond dynamic panel data estimation in our analysis (Arellano & Bond, ; Arellano & Bover, ; Blundell & Bond, ). This method simultaneously controls for autoregression and firm‐level effects that may influence R&D spending.…”

Section: Methodsmentioning

confidence: 99%

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Unlocking the value of real options: How firm‐specific learning conditions affect R&D investments under uncertainty

Roß

Fisch

Varga

2017

Strategic Entrepreneurship

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Research Summary Why do some firms increase R&D investments in the face of uncertainty, while others do not? Contrary to common wisdom, this study posits that uncertainty prompts firms to invest in R&D. The value to invest under uncertainty is, however, bounded by a firm's learning conditions (i.e., human capital, relatedness of innovation activities, and industry maturity). An empirical test on a cross‐industry panel of 551 business divisions of manufacturing firms reveals how organization‐environment interactions determine the firm‐specific value to invest in learning prior to full‐scale commercialization. The insights help to bridge real options theory and the learning literature. Managerial Summary Uncertainty about the market environment makes investment decisions in R&D and the commercialization of new products a challenge: should firms “wait and see” until uncertainty resolves to avoid the risk of betting on the wrong product or commit further resources regardless? Our analysis suggests that manufacturing firms often take a mixed approach (“act and see”). While deferring investments in the commercialization of new products, they undertake further R&D to inform decision making by insights that would otherwise be unavailable. However, we find that the benefit of such practice depends on the learning conditions of the individual firm. What is risky for firms with disadvantages in human capital and technology development is value enhancing for firms with good foundations for learning through R&D.

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Section: Methodsmentioning

confidence: 99%

Section: Methodsmentioning

confidence: 99%

Unlocking the value of real options: How firm‐specific learning conditions affect R&D investments under uncertainty

Roß

Fisch

Varga

2017

Strategic Entrepreneurship

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“…The human genome project, led by the U.S. government from 1988 to 2003, generated $796 billion in economic impact and helped the U.S. economy generate $141 for every $1 spent on the R&D project (Tripp and Grueber, 2011). Investment in product and process innovation indicates a firm's R&D intensity and is a major outcome of collaborations, which involve a risky decision and highly uncertain returns over a long period of time (Eroglu and Hofer, 2014; Lim, 2015; Mackelprang et al, 2015). Understanding some of the factors that motivate suppliers, which are dependent upon major customers to enhance their R&D intensity, is critical.…”

Section: Introductionmentioning

confidence: 99%

Supplier dependence and R&D intensity: The moderating role of network centrality and interconnectedness

Kim

Zhu

2018

J of Ops Management

144

167

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This study examines whether financial dependence upon a few customers is negatively related to the allocation of innovation resources of supplier firms. Furthermore, this study investigates whether these negative effects of supplier dependence on research and development (R&D) intensity are reduced when the supplier leverages social capital conceptualized in terms of eigenvector centrality and interconnectedness. Using panel data, we find that a supplier firm's dependence upon major customers has a negative relationship with the supplier firm's R&D intensity. Our results, however, reveal that a dependent supplier having high eigenvector centrality or working with other companies that are densely connected to each other mitigates the negative effects of supplier dependence on R&D intensity. These findings highlight the importance of external information or resources being available in supply networks when suppliers that are dependent upon major customers explore and exploit opportunities for new product development.

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“…With increasing attention of the board's members, there is an increasing need for top managers to defend strategic decisions and moves through proposals to the board (Castaner and Kavadis 2013). Indeed, the vigilance of a board tends to increase when there is a higher percentage of external directors (Lim 2015), the CEO does not chair the board (Finkelstein and D'Aveni 1994;Kesner and Johnson 1990), the CEO does not appoint board members (Zajac and Westphal 1994), and ownership is very concentrated (Castaner and Kavadis 2013). In addition, top decision makers' task demands tend to increase when they are facing activist shareholders (Walls et al 2012).…”

Section: Managers' Task Demands and Top-down Attention Allocationmentioning

confidence: 99%

Attention and Entrepreneurial Cognition

Shepherd

Patzelt²

2018

Entrepreneurial Cognition

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The role of reference point in CEO restricted stock and its impact on R&D intensity in high‐technology firms

Cited by 101 publications

References 75 publications

Unlocking the value of real options: How firm‐specific learning conditions affect R&D investments under uncertainty

Unlocking the value of real options: How firm‐specific learning conditions affect R&D investments under uncertainty

Supplier dependence and R&D intensity: The moderating role of network centrality and interconnectedness

Attention and Entrepreneurial Cognition

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