Finding the sweet spot : effects of exporting on the relationship between R&D investment and NPD performance
Peer reviewed, Journal article
Accepted version

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Date
2024Metadata
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- Scientific articles [2329]
Original version
10.1108/IMR-02-2024-0039Abstract
Purpose: The aim of this research is twofold: (1) to investigate when the effect of R&D investment on New Product Development (NPD) performance peaks – the sweet spot and (2) to analyze the influence of firms’ export activities on where that spot is. Drawing on the knowledge-based view (KBV), we argue that export intensity and export experience lead to differential effects on how R&D investments are converted into new products. Design/methodology/approach: We test our conceptual framework using time lagged data and optimal-level analysis. The dataset consists of an unbalanced panel of 608,891 observations and 333,516 firms. Findings: The results support the expected inverted U-shaped relationship between R&D investment and NPD performance. They also show moderating effects of export intensity and experience. Export intensity enhances innovation processes by enabling firms to stretch the points at which R&D investments eventually taper off. In contrast, export experience improves firms’ ability to convert R&D investments into NPD performance. Our results demonstrate that, all else equal, firms with relatively higher export experience can spend less on R&D and still achieve higher levels of NPD performance. Originality/value: We contribute to the literature by investigating how export activities provide a valuable context for understanding the theoretical mechanisms that help explain the inverted U-shaped relationship between R&D investment and innovation. We show the effects of exporting activities on the precise points where the R&D investment–NPD performance relationship peaks, thereby identifying the optimal point within this nonlinear relationship. Finding the sweet spot : effects of exporting on the relationship between R&D investment and NPD performance