Absorbed Slack, Political Ties and R&D Investment—— Empirical Study of Listed Company in China

Science Research Management ›› 2017, Vol. 38 ›› Issue (4): 46-53.

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Absorbed Slack, Political Ties and R&D Investment—— Empirical Study of Listed Company in China

Chen Shuangying¹， Yang Chenxiu¹， Jing Runtian²

1. School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 611731, Sichuan, China;
2. Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai 200030, China

Received:2014-12-05 Revised:2016-04-15 Online:2017-04-20 Published:2017-04-17

Abstract

Abstract: Research and development (R&D) is the key factor to the firm’s competitive advantages. Based on resource based theory, the paper studies the direct effect and moderate effect of between the absorbed slack, political ties strength and the R&D investment with the panel data of 233 listed companies from 2007 to 2011.After Cross-section Fixed Effects Tests, the paper finds that the absorbed slack has inverted U-shaped relationship with R&D investment and political ties strength has positive effect on R&D investment. Further, it finds that both the positive and negative effects of absorbed slack on R&D investment are more pronounced for list companies with stronger political ties. The paper extends the theoretical research of R&D investment, also it plays the practical value to Chinese firms’ tech-innovation.

Key words: absorbed slack, political ties strength, R&D investment

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Absorbed Slack, Political Ties and R&D Investment—— Empirical Study of Listed Company in China

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