Integrated effects on R&D composite input: China manufacturing firms practices

Abstract

Abstract：R&D input intensity is usually correlated with corporate performance, even though some researchers doubt the importance of R&D capital intensity. This study develops and tests a model where integrated effects moderate the relationship between R&D personnel, capital inputs, and firm performance. We use 52 large Chinese manufacturing firms to demonstrate that corporate training, advertising and government funding greatly increase the impact of firm performance. We find that higher levels of employee training and R&D personnel intensity have a strong positive effect on firm's performance. We also show that advertising expenses has a similar positive effect on R&D capital intensity. Our findings inform R&D resources input intensity with great respect to firm's financial performance only in the condition of enhancing employees' knowledge and capability, increasing the influences of bland in the market. At the same time, government may be only playing a complimentary role in promoting technological innovation with the support of S&T project funding.