Research Article
BibTex RIS Cite

MODERATOR EFFECT OF RDI ON FIRM FINANCE PERFORMANCE: TAIWAN TEXTILE INDUSTRY

Year 2018, Volume: 7 Issue: 2, 156 - 163, 15.07.2018

Tsung-chun Chen Hsiao-min Chen Shiann-ming Wu Xiao-xuan Chen

https://doi.org/10.17261/Pressacademia.2018.838

Abstract

Purpose- Is the textile industry only pursuing high labor intensity, low value added products and moving factories to reduce production costs? Just only high tech industries alone emphasize research and development investment(R&D) and pursue high value added products?
Methodolog - This study examined the impact of R&D investment on the finance performance of the Taiwanese textile industry, for the period 2006-2016. A panel data model was used to empirically analyses the impact of R&D intensity (RDI), firm size on finance performance.
Finding - RDI of the textile industry has a positive impact on financial performance and lag periods. In regard to the resource based view, the resources owned by an enterprise are positively correlated with performance. However, this study also finds that RDI as moderator effect for firm's size on finance performance.
Conclusion- The effect of R&D on finance performance is not only limited to the high tech industry. This indicates that RDI affect firms' sustainable management.

Keywords

R&D intensity、finance performance knowledge absorptive capacity firm Size textile industry

References

  • Barney, J., Wright, M., & Ketchen, D. J. (2001). The resource-based view of the firm: ten years after 1991. Journal of management, 27(6), 625-641.
  • Becker, B., & Hall, S. G. (2013). Do R&D strategies in high tech sectors differ from those in low tech sectors? An alternative approach to testing the pooling assumption. Economic Change and Restructuring, 46(2), 183-202.
  • Bogliacino, F., Pianta, M. (2013). Profits, R&D, and innovation-a model and a test. Industrial and Corporate Change 22 (3), pp. 649-678.
  • Chang, C.-L., & Robin, S. (2012). Knowledge sourcing and firm performance in an industrializing economy: the case of Taiwan (1992–2003). Empirical Economics, 42(3), 947-986.
  • Chen, Y.-S., & Chang, K.-C. (2010). Analyzing the nonlinear effects of firm size, profitability, and employee productivity on patent citations of the US pharmaceutical companies by using artificial neural network. Scientometrics, 82(1), 75-82.
  • Chiao, T. C. (2013). The correlation between R&D activities and income rate in addition to gross profit rate of the enterprise operation. Advanced Materials Research 798, pp. 865-868.
  • Ciftci, M., & Cready, W. M. (2011). Scale effects of R&D as reflected in earnings and returns. Journal of Accounting and Economics, 52(1), 62-80.
  • Cohen, W. M., & Levinthal, D. A. (1989). Innovation and learning: the two faces of R&D. The economic journal, 99(397), 569-596.
  • Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: a new perspective on learning and innovation. Administrative Science Quarterly, 128-152.
  • De, P. K., & Nagaraj, P. (2014). Productivity and firm size in India. Small Business Economics, 42(4), 891-907.
  • Falk, M. (2012). Quantile estimates of the impact of RDI on firm performance. Small Business Economics, 39(1), 19-37.
  • Ferragina, A. M., & Mazzotta, F. (2014). FDI spillovers on firm survival in Italy: absorptive capacity matters! The Journal of Technology Transfer, 39(6), 859-897.
  • Gentry, R. J., & Shen, W. (2013). The impacts of performance relative to analyst forecasts and analyst coverage on firm R&D intensity. Strategic Management Journal, 34(1), 121-130.
  • Haberl, C. (2015). The textile industry. In R. Ayadi, M. Dabrowski, & L. De Wulf (Eds.), Economic and Social Development of the Southern and Eastern Mediterranean Countries (pp. 127-142). Cham: Springer International Publishing. doi:10.1007/978-3-319-11122-3_9
  • Jacobs, B., Nahuis, R., & Tang, P. J. G. (2002). Sectoral productivity growth and R&D spillovers in the Netherlands. De Economist, 150(2), 181-210.
  • Kim, M. (2015). Productivity spillovers from FDI and the role of domestic firm’s absorptive capacity in South Korean manufacturing industries. Empirical Economics, 48(2), 807-827.
  • Kiran, R. (2017). IPR scenario and factors for promoting IPR culture: a post-TRIPS period analysis of selected pharmaceutical firms in North India. Economic research-Ekonomska istraživanja, 30(1), 873-891.
  • Lee, S., Park, G., Yoon, B., & Park, J. (2010). Open innovation in SMEs—an intermediated network model. Research Policy, 39(2), 290-300.
  • Legros, D., & Galia, F. (2012). Are innovation and R&D the only sources of firms’ knowledge that increase productivity? An empirical investigation of French manufacturing firms. Journal of Productivity Analysis, 38(2), 167-181.
  • Lejarraga, J., & Martinez-Ros, E. (2014). Size, R&D productivity and decision styles. Small Business Economics, 42(3), 643-662.
  • Levin, A., Lin, C.-F., & James Chu, C.-S. (2002). Unit root tests in panel data: asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1-24.
  • Li, X. (2011). Sources of external technology, absorptive capacity, and innovation capability in Chinese state-owned high tech enterprises. World Development, 39(7), 1240-1248.
  • Lin, L. (2006) The influences of R&D expenditures on knowledge-based economy in Taiwan. Vol. 4253 LNAI - III. 10th International Conference on Knowledge-Based Intelligent Information and Engineering Systems, KES 2006 (pp. 930-937). Bournemouth: Springer Verlag.
  • Lu, Y., Karpova, E. (2012). An investigation of Chinese textile firms' R&D performance. Clothing and Textiles Research Journal 30 (3), pp. 217-231.
  • Maddala, G. S., & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, 61(S1), 631-652.
  • Maliranta, M. (2005). R&D, international trade and creative destruction—empirical findings from Finnish manufacturing industries. Journal of Industry, Competition and Trade, 5(1), 27-58.
  • Naanaa, I. D., & Sellaouti, F. (2017). Technological diffusion and growth: case of the Tunisian manufacturing sector. Journal of the Knowledge Economy, 8(1), 369-383.
  • Poldahl, A. (2012). The two faces of R&D: does firm absorptive capacity matter? Journal of Industry, Competition and Trade, 12(2), 221-237.
  • Sokolov-Mladenović, S., Cvetanović, S., & Mladenović, I. (2016). R&D expenditure and economic growth: EU28 evidence for the period 2002–2012. Economic Research-Ekonomska Istraživanja, 29(1), 1005-1020. doi:10.1080/1331677x.2016.1211948
  • Truett, L. J., & Truett, D. B. (2014). A ray of hope? Another look at the Italian textile industry. Empirical Economics, 46(2), 525-542.
  • Urata, S., & Kawai, H. (2002). Technological progress by small and medium enterprises in Japan. Small Business Economics, 18(1), 53-67.
  • Vithessonthi, C., & Racela, O. C. (2016). Short- and long-run effects of internationalization and R&D intensity on firm performance. Journal of Multinational Financial Management, 34, 28-45.
  • Von Tunzelmann, N., & Acha, V. (2005). Innovation in ‘low tech’ industries. The Oxford handbook of innovation, 5, 13.
  • Wang, N., & Hagedoorn, J. (2014). The lag structure of the relationship between patenting and internal R&D revisited. Research Policy, 43(8), 1275-1285.
  • Xing M. (2018). The impact of spillovers on strategic R&D under uncertainty. Economic Research-Ekonomska Istraživanja.31(1):428-39.

Year 2018, Volume: 7 Issue: 2, 156 - 163, 15.07.2018

Tsung-chun Chen Hsiao-min Chen Shiann-ming Wu Xiao-xuan Chen

https://doi.org/10.17261/Pressacademia.2018.838

Abstract

References

  • Barney, J., Wright, M., & Ketchen, D. J. (2001). The resource-based view of the firm: ten years after 1991. Journal of management, 27(6), 625-641.
  • Becker, B., & Hall, S. G. (2013). Do R&D strategies in high tech sectors differ from those in low tech sectors? An alternative approach to testing the pooling assumption. Economic Change and Restructuring, 46(2), 183-202.
  • Bogliacino, F., Pianta, M. (2013). Profits, R&D, and innovation-a model and a test. Industrial and Corporate Change 22 (3), pp. 649-678.
  • Chang, C.-L., & Robin, S. (2012). Knowledge sourcing and firm performance in an industrializing economy: the case of Taiwan (1992–2003). Empirical Economics, 42(3), 947-986.
  • Chen, Y.-S., & Chang, K.-C. (2010). Analyzing the nonlinear effects of firm size, profitability, and employee productivity on patent citations of the US pharmaceutical companies by using artificial neural network. Scientometrics, 82(1), 75-82.
  • Chiao, T. C. (2013). The correlation between R&D activities and income rate in addition to gross profit rate of the enterprise operation. Advanced Materials Research 798, pp. 865-868.
  • Ciftci, M., & Cready, W. M. (2011). Scale effects of R&D as reflected in earnings and returns. Journal of Accounting and Economics, 52(1), 62-80.
  • Cohen, W. M., & Levinthal, D. A. (1989). Innovation and learning: the two faces of R&D. The economic journal, 99(397), 569-596.
  • Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: a new perspective on learning and innovation. Administrative Science Quarterly, 128-152.
  • De, P. K., & Nagaraj, P. (2014). Productivity and firm size in India. Small Business Economics, 42(4), 891-907.
  • Falk, M. (2012). Quantile estimates of the impact of RDI on firm performance. Small Business Economics, 39(1), 19-37.
  • Ferragina, A. M., & Mazzotta, F. (2014). FDI spillovers on firm survival in Italy: absorptive capacity matters! The Journal of Technology Transfer, 39(6), 859-897.
  • Gentry, R. J., & Shen, W. (2013). The impacts of performance relative to analyst forecasts and analyst coverage on firm R&D intensity. Strategic Management Journal, 34(1), 121-130.
  • Haberl, C. (2015). The textile industry. In R. Ayadi, M. Dabrowski, & L. De Wulf (Eds.), Economic and Social Development of the Southern and Eastern Mediterranean Countries (pp. 127-142). Cham: Springer International Publishing. doi:10.1007/978-3-319-11122-3_9
  • Jacobs, B., Nahuis, R., & Tang, P. J. G. (2002). Sectoral productivity growth and R&D spillovers in the Netherlands. De Economist, 150(2), 181-210.
  • Kim, M. (2015). Productivity spillovers from FDI and the role of domestic firm’s absorptive capacity in South Korean manufacturing industries. Empirical Economics, 48(2), 807-827.
  • Kiran, R. (2017). IPR scenario and factors for promoting IPR culture: a post-TRIPS period analysis of selected pharmaceutical firms in North India. Economic research-Ekonomska istraživanja, 30(1), 873-891.
  • Lee, S., Park, G., Yoon, B., & Park, J. (2010). Open innovation in SMEs—an intermediated network model. Research Policy, 39(2), 290-300.
  • Legros, D., & Galia, F. (2012). Are innovation and R&D the only sources of firms’ knowledge that increase productivity? An empirical investigation of French manufacturing firms. Journal of Productivity Analysis, 38(2), 167-181.
  • Lejarraga, J., & Martinez-Ros, E. (2014). Size, R&D productivity and decision styles. Small Business Economics, 42(3), 643-662.
  • Levin, A., Lin, C.-F., & James Chu, C.-S. (2002). Unit root tests in panel data: asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1-24.
  • Li, X. (2011). Sources of external technology, absorptive capacity, and innovation capability in Chinese state-owned high tech enterprises. World Development, 39(7), 1240-1248.
  • Lin, L. (2006) The influences of R&D expenditures on knowledge-based economy in Taiwan. Vol. 4253 LNAI - III. 10th International Conference on Knowledge-Based Intelligent Information and Engineering Systems, KES 2006 (pp. 930-937). Bournemouth: Springer Verlag.
  • Lu, Y., Karpova, E. (2012). An investigation of Chinese textile firms' R&D performance. Clothing and Textiles Research Journal 30 (3), pp. 217-231.
  • Maddala, G. S., & Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and Statistics, 61(S1), 631-652.
  • Maliranta, M. (2005). R&D, international trade and creative destruction—empirical findings from Finnish manufacturing industries. Journal of Industry, Competition and Trade, 5(1), 27-58.
  • Naanaa, I. D., & Sellaouti, F. (2017). Technological diffusion and growth: case of the Tunisian manufacturing sector. Journal of the Knowledge Economy, 8(1), 369-383.
  • Poldahl, A. (2012). The two faces of R&D: does firm absorptive capacity matter? Journal of Industry, Competition and Trade, 12(2), 221-237.
  • Sokolov-Mladenović, S., Cvetanović, S., & Mladenović, I. (2016). R&D expenditure and economic growth: EU28 evidence for the period 2002–2012. Economic Research-Ekonomska Istraživanja, 29(1), 1005-1020. doi:10.1080/1331677x.2016.1211948
  • Truett, L. J., & Truett, D. B. (2014). A ray of hope? Another look at the Italian textile industry. Empirical Economics, 46(2), 525-542.
  • Urata, S., & Kawai, H. (2002). Technological progress by small and medium enterprises in Japan. Small Business Economics, 18(1), 53-67.
  • Vithessonthi, C., & Racela, O. C. (2016). Short- and long-run effects of internationalization and R&D intensity on firm performance. Journal of Multinational Financial Management, 34, 28-45.
  • Von Tunzelmann, N., & Acha, V. (2005). Innovation in ‘low tech’ industries. The Oxford handbook of innovation, 5, 13.
  • Wang, N., & Hagedoorn, J. (2014). The lag structure of the relationship between patenting and internal R&D revisited. Research Policy, 43(8), 1275-1285.
  • Xing M. (2018). The impact of spillovers on strategic R&D under uncertainty. Economic Research-Ekonomska Istraživanja.31(1):428-39.
There are 35 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Tsung-chun Chen This is me 0000-0003-2903-8769

Hsiao-min Chen This is me 0000-0001-6382-0055

Shiann-ming Wu This is me 0000-0001-6036-7312

Xiao-xuan Chen This is me 0000-0001-7716-9670

Publication Date July 15, 2018
Published in Issue Year 2018 Volume: 7 Issue: 2

Cite

APA Chen, T.-c., Chen, H.-m., Wu, S.-m., Chen, X.-x. (2018). MODERATOR EFFECT OF RDI ON FIRM FINANCE PERFORMANCE: TAIWAN TEXTILE INDUSTRY. Journal of Business Economics and Finance, 7(2), 156-163. https://doi.org/10.17261/Pressacademia.2018.838

Journal of Business, Economics and Finance (JBEF) is a scientific, academic, double blind peer-reviewed, quarterly and open-access journal. The publication language is English. The journal publishes four issues a year. The issuing months are March, June, September and December. The journal aims to provide a research source for all practitioners, policy makers and researchers working in the areas of business, economics and finance. The Editor of JBEF invites all manuscripts that that cover theoretical and/or applied researches on topics related to the interest areas of the Journal. JBEF charges no submission or publication fee.



Ethics Policy - JBEF applies the standards of Committee on Publication Ethics (COPE). JBEF is committed to the academic community ensuring ethics and quality of manuscripts in publications. Plagiarism is strictly forbidden and the manuscripts found to be plagiarized will not be accepted or if published will be removed from the publication. Authors must certify that their manuscripts are their original work. Plagiarism, duplicate, data fabrication and redundant publications are forbidden. The manuscripts are subject to plagiarism check by iThenticate or similar. All manuscript submissions must provide a similarity report (up to 15% excluding quotes, bibliography, abstract, method).


Open Access - All research articles published in PressAcademia Journals are fully open access; immediately freely available to read, download and share. Articles are published under the terms of a Creative Commons license which permits use, distribution and reproduction in any medium, provided the original work is properly cited. Open access is a property of individual works, not necessarily journals or publishers. Community standards, rather than copyright law, will continue to provide the mechanism for enforcement of proper attribution and responsible use of the published work, as they do now.