Purpose
This paper aims to examine the behavioral determinants of firm research and development (R&D) investment in China by looking into the interaction between performance aspiration and industrial search.
Design/methodology/approach
The author argues that the performance aspiration effect is strengthened in R&D-intensive industries based on the isomorphism rationale, whereas it is weakened by high industry R&D intensity owing to the differentiation rationale. Deriving from the isomorphism and differentiation rationales, the author developed a set of competitive hypotheses and empirically tested them by using a large panel data of 6,539 company-years from China for the period 2001-2003.
Findings
First, R&D intensity is positively related to the deviation of firm performance from aspiration. Second, industry R&D intensity negatively moderates the relationship between performance aspiration and firm R&D intensity for firms performing above aspiration. Therefore, the results provide support for the differentiation rationale.
Originality/value
The study contributes to the ongoing research that provides and tests the behavioral explanations for R&D and innovation. By delving into the moderating role of industry R&D intensity, the author advocate the need for contextualizing performance aspiration in industrial environments. The study informs policymakers and business leaders about the interaction between the external environment and internal decision process in R&D investment decision.
With increasingly intense competition many companies have extended the scope of their cost management activities across organizational boundaries. Supply chain cost reduction becomes a new source of achieving competitive advantage. Although interests in reducing supply chain cost are growing, few researches have been directed towards a systematic development of supply chain cost reduction. To reduce supply chain cost, firstly the structure of it should be seen clearly. This study analyzes the supply chain processes and supply chain time, identifies the components of supply chain cost and how these costs occur and be influenced. Based on the analysis and integrating previous research findings, this paper presents a theoretical model, which provides the foundation and specific techniques for cost reduction in supply chain.
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