The Interactions between R&amp;D Investment Decisions and Compensation Policy

Ryan, Harley E.; Wiggins, Roy A.

doi:10.2307/3666319

Cited by 173 publications

(128 citation statements)

References 41 publications

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“…Similarly, employee stock ownership may be targeted to various levels of employees, including lower-level employees. Although some previous empirical studies have shown that key employees are likely to have greater stock ownership (Brickley and Hevert, 1991) and that knowledgeintensive firms have greater employee ownership (Chen and Huang, 2006;Ryan and Wiggins, 2002), data on the specific shareholding of key knowledge workers would enhance the validity of the empirical findings.…”

Section: Discussionmentioning

confidence: 99%

Firm‐specific knowledge resources and competitive advantage: the roles of economic‐ and relationship‐based employee governance mechanisms

Wang

Mahoney

2009

Strategic Management Journal

376

350

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INTRODUCTIONAccording to the resource-based view of the firm, a firm's ability to achieve and sustain a competitive advantage is directly related to the strength of 'isolating mechanisms' that protect the firm's valuable and rare resources from imitation by rivals (Mahoney and Pandian, 1992;Rumelt, 1984). An important isolating mechanism is the firmKeywords: Firm-specific knowledge resources; employee human capital; employee governance mechanisms; resource-based view of the firm *Correspondence to: Heli C. Wang, Department of Management of Organizations, School of Business and Management, Hong Kong University of Science and Technology, Kowloon, Hong Kong. E-mail: mnheli@ust.hk specificity of resources. Resources with such a feature are not easily tradable or redeployable outside the firm (Dierickx and Cool, 1989), making it difficult for rivals to imitate them. Resourceand knowledge-based research generally maintains that among the types of firm-specific resources examined, firm-specific knowledge has the greatest potential to serve as a source of sustainable competitive advantage (Coff, 1997;Grant, 1996;Kogut and Zander, 1992).A firm's knowledge base is the information inputs, know-how, and capabilities that organizational members draw on when searching for innovative solutions (Dosi, 1988). Firm-specific knowledge often results from a search for, and accumulation of, new solutions that build upon

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Section: Discussionmentioning

confidence: 99%

Firm‐specific knowledge resources and competitive advantage: the roles of economic‐ and relationship‐based employee governance mechanisms

Wang

Mahoney

2009

Strategic Management Journal

376

350

View full text Add to dashboard Cite

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“…Thus, increased managerial ownership fosters greater alignment between the incentives of owners and managers, thereby inducing managers to pursue strategies geared toward long-term investment and value. Further, Ryan and Wiggins (2002) and Wu and Tu (2007) argue that firms that provide managers with stock-based compensation are likely to increase spending on R&D aimed at sustaining long-term growth. Similarly, Mahoney and Thorne (2005) find that long-term compensation schedules for corporate executives mitigate environmental weaknesses and increase environmental responsibility.…”

Section: Legal Families Corporate Environmental Responsibility and mentioning

confidence: 98%

Corporate Environmental Responsibility: A Legal Origins Perspective

2015

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In this study, we examine the determinants of corporate environmental responsibility (CER), as well as the relationship between legal systems and CER as measured by a unique set of global environmental cost data. Results of our analyses show that firms' legal origins affect CER, which requires a long-term management perspective. Specifically, our results indicate that civil law firms exhibit significantly higher levels of CER than common law firms. In addition, results of an auxiliary test suggest that manager shareholding has a significant, nonlinear relationship with CER. The association between a firm's legal origin and its CER performance remains robust after controlling for the effects of managerial ownership and issues related to endogeneity. Our findings imply that although the majority of corporate law studies in the past few decades provide support for the common law system emphasizing the maximization of shareholder value and investor protection, the civil law system stressing the maximization of stakeholder wealth and the importance of CER may become more influential in the coming decades as CER becomes central to firms' operations.

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“…Lastly, future growth opportunities may positively affect R&D expenditures. Ryan and Wiggins (2002) argued that firms with high growth opportunities have stronger incentives to make larger R&D investments to exploit these opportunities. Lee and O'Neill (2003) also suggested that mangers in firms with investment opportunities tend to invest more in R&D.…”

Section: Hypothesesmentioning

confidence: 99%