The impact of the effective R&D capability on the inefficient R&D investment and firm performance with the moderation effect by intangible assets and R&D intensity: Evidence from US manufacturing firms

Sustaining the effective R&D capability higher than those of rivals has received steady attention from researcher in the field of strategy and innovation since it has significant impact on a firm’s sustainable competiveness and the growth of economy. In this study, we investigate what context accelerate firms with effective R&D capability not to achieve optimal spending R&D investment and the impact of financial status on the relations of effective R&D capability to the firm performance by using the concept of Research Quotient (RQ). We find that while the effective R&D capability leads firms to deviate from optimal R&D spending and this association is positively moderated by intangible assets of the firm, the effective R&D capability leads firms to enhance the firm performance and this association is positively moderated by the R&D intensity of the firm. Our study offers extensions of prior research on exploration-exploitation and behavioral theory for innovation.