Finding the sweet spot: effects of exporting on the relationship between R&D investment and NPD performance

Sousa, Carlos M. P.; Tsinopoulos, Christos; Yan, Ji; Benito, Gabriel R. G.

Abstract

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.

Citation

Sousa, C. M. P., Tsinopoulos, C., Yan, J., & Benito, G. R. G. (online). Finding the sweet spot: effects of exporting on the relationship between R&D investment and NPD performance. International Marketing Review, https://doi.org/10.1108/imr-02-2024-0039

• Journal Article Type: Article
• Acceptance Date: Oct 23, 2024
• Online Publication Date: Dec 4, 2024
• Deposit Date: Jan 2, 2025
• Publicly Available Date: Jan 2, 2025
• Journal: International Marketing Review
• Print ISSN: 0265-1335
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• DOI: https://doi.org/10.1108/imr-02-2024-0039
• Public URL: https://durham-repository.worktribe.com/output/3318752