A Study On R&D Investment And Firm Performance Based On The Characteristics Of Top Management Team

With the increase in corporate R&D investment, the implementation of R&Dinvestment is gaining increasingly more and more attention. In recent years, scholars havecontinuously attempted to research the implementation of R&D investment from differentperspectives. However, due to the limitation of research methods and data selection,research of this kind remains in a relatively simple level. Staff at all levels should take partin the R&D activities, of which the Top Management Team (TMT) is the pillar. Thebehavior of the TMT characterized by demographic characteristics determines the wholeprocess of R&D investment and implementation arrangement. Hence this paper tries toexplore the moderating effect of the TMT demographic characteristics in R&D investmentand firm performance from a unique perspective.First of all, this paper went through all the references concerning the relationshipbetween R&D investment and firm performance and TMT characteristics. Second, thispaper analyzes the cause for the correlation between R&D investment and firmperformance from macro and micro perspective. Therefore, the variable of TMT isintroduced. Theoretically the TMT can influence the correlation between R&D investmentand firm performance in two ways, both of which are discussed in the paper. The theory istested and analyzed empirically based on “Upper-echelon Theory”. Based on a full sampletest, two variables, marketization and the nature of property rights are introduced toanalyze the moderating variation of the TMT characteristics in different circumstances andto carry out empirical tests respectively. Finally, analysis of the empirical results showsthat the TMT demographic characteristics can moderate R&D investment and firmperformance on the whole, however, different demographic characteristics display certainvariations.