The impact of R&D investment on mitigating supply chain disruptions: Empirical evidence from U.S. firms

Abstract

The purpose of this paper is to examine the moderating effect of a firm's R&D investment in mitigating supply chain disruptions. We use four categories of disruption risks in a supply chain: demand, process, supply, and environmental. Building upon dynamic capability theory, we examine the relationships among a firm's R&D investment, supply chain disruption risk drivers, supply chain performance, and firm performance, using data collected from manufacturing and service organizations in the U.S. Our findings show that a firm's R&D investment can be regarded as enhancing the firm's resilience capability. R&D investment significantly mitigates the effects of process disruption, supply disruption, and demand disruption on firm performance. R&D investment significantly mitigates the effects of process disruption and environmental disruption on supply chain performance. Our study provides one of the early empirical findings of the role of a firm's investment in innovation as a means of improving the firm's resilience to supply chain disruptions.