The strategic choice for applying government subsidized RD: The relationship among organizational resources and capabilities, strategy, and performance
Journal
PICMET 2018 - Portland International Conference on Management of Engineering and Technology: Managing Technological Entrepreneurship: The Engine for Economic Growth, Proceedings
Date Issued
2018
Author(s)
Abstract
Government subsidized RD projects have been widely employed to promote innovation and RD activities in most OECD countries. From the firms' perspective, the strategic choice to participate or not to participate in government subsidized RD projects affects its performance. Given the much-debated nature and in-practice importance, this study attempts to investigate the relationships among organizational resources and capabilities, strategic choice, and firm performance. The empirical study employs data from the Taiwan Economic Journal (TEJ) for its timely verified financial data of listed companies in Taiwan. We analyze the behavior of Taiwanese high-tech firms in electronics and biotechnology industry while they consider applying for the RD subsidy from Industrial Technology Development Program (ITDP) sponsored by Taiwanese government. We examined the relationship between organizational resources and capabilities and the inclination towards the strategic choice of participating in the ITDP, and evaluated their respective performance with a control of endogeneity bias by implementing Heckman's two-stage estimation procedure. Our findings suggest that the tendency of the strategic choice to participate in government subsidized RD project is strongly correlated with a firm's absorptive capabilities. The strategic choice of participating or not to participating in ITDP in theoretically appropriate conditions is able to enhance firm performance. © 2018 Portland International Conference on Management of Engineering and Technology, Inc. (PICMET).
SDGs
Other Subjects
Economics; Absorptive capability; Biotechnology industry; Economic journals; Empirical studies; Industrial technology; Resources and capabilities; Taiwanese high-tech firms; Two-stage estimations; Electronics industry
Type
conference paper