Impacts of environmental uncertainty and firm's capabilities on R&D investment - Innovation: Management, Policy & Practice

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Impacts of environmental uncertainty and firm's capabilities on R&D investment: Evidence from China

Zhongfeng Su
School of Business, Nanjing University, Nanjing, Jiangsu, China

En Xie
School of Management, Xi'an Jiaotong University, Xi'an, Shaanxi, China

Jisheng Peng
School of Business, Nanjing University, Nanjing, Jiangsu, China

PP: 269 - 282

Abstract

This study tests the impacts of environmental uncertainty (market uncertainty, technological uncertainty, and competitive intensity) and firms' capabilities (marketing capability, technological capability, and operations capability) on R&D investment.

Based on a survey of Chinese firms, we find that market uncertainty, technological capability, and operations capability all have positive influences, technological uncertainty has no effect, while competitive intensity and marketing capability have adverse effects on R&D investment. This research not only contributes to our knowledge of heterogeneity in R&D investment among firms, but also tests empirically the competing perspectives on the impacts of environmental uncertainty and firms' capabilities on R&D investment.

Keywords

environmental uncertainty; firm capabilities; R&D investment; China; heterogeneity

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