Research and development investment strategy and market performance

In this study, we aimed to analyze research and development (R&D) business strategy with regard to investment funded by the government or by the business itself in relation to market performance. Because these 2 types of subsidized and nonsubsidized R&D may have important implications for market performance, it is worth considering their differences. In this paper empirical evidence is provided of the relationships among government-funded R&D, private enterprise-funded R&D, and market performance in innovation projects. Regression analysis was used to test the hypotheses using a sample of 500 projects. The results indicate that market performance of businesses that fund their own R&D is statistically and significantly greater than that of high investment by government in R&D. Finally, managerial implications and possible future research directions are discussed.