A Study on the Impact of R&D Investment on Firm’s Performance : Technological Regimes Perspective in Shanghai and Shenzhen Market Listed Companies

Abstract

Recently the Chinese government has been vigorously implementing an innovation-driven development strategy，relaxing restrictions on financing conditions for enterprise research and development (R&D) innovation. China’s MOST,MOF, and STA jointly issued a document giving tax preferences to enterprises who comply with conditions for R&D expenditures. These policies cause enterprises to continually expand their research fields, add to their R&D investment strength. R&D investment directly impacts enterprises’ current year performance and subsequent years’ performance. This paper is based on technological regime perspective, and from the four dimensions of technological opportunities, innovation appropriability, technical progress accumulation as well as external knowledge acquisition. It used industrial enterprises above designated size listed companies that traded on an A-share on the Shanghai and Shenzhen stock exchanges as research samples to explore the impact of R&D investment on enterprise performance.. Our research found that there was a large difference between enterprises with different categories of technological regimes and the impact of R&D investment on enterprise performance. we provided different recommendations for enterprises of different categories with targeted activities for launching R&D, and also provided beneficial examples and references for theoretical spheres of industrial and commercial education, and for exploring the impact of R&D investment on enterprise performance from the four dimensions of technological regimes.