Identifying And Investigating Key Factors Affecting Financial Management Capability of R&D In High-Tech Aerospace Industries

Subject Areas : Journal of Investment Knowledge

Mohammadhosein Asari ¹ , Abbas khamseh ² , Nosratollah Shadnoosh ³

1 - Department of Technology Management, Central Tehran University Branch, Islamic Azad University, Tehran, Iran.
2 - Department of Industrial Management, Karaj Branch, Islamic Azad University, Karaj, Iran .
3 - Department of Technology Management, Central Tehran University Branch, Islamic Azad University, Tehran, Iran

Received: 2019-06-23 Accepted : 2019-10-26 Published : 2021-12-22

Keywords: Finances, Aerospace industries, R&D, Finances Management Capability, High technology,

Abstract :

For this purpose companies seeking to invest more in innovative activities such as R&D projects and to pave the way for future business and competition. Due to R&D management features, achieving the methods that ensure its success is particularly important. The capability of financial management in R&D management of the aerospace industry, considering its cost and time, is one of the important pillars for the success of innovative organizational activities.The present study investigates the factors affecting the capability of financial resources management in R&D management. The research is an applied and descriptive survey method. In this regard, influencing factors on financial management capability based on literature review and opinion of aerospace industry experts were extracted in three general categories and verified questionnaires were distributed to the expert community and the results were evaluated by confirmatory factor analysis and structural equations and Smart-PLS software. The results show that the process, budgeting and financing dimensions as well as the commercialization dimensions have a significant and positive impact on the financial management capability in R&D management. Based on the coefficient of determination and level of impact of factor analysis, legal systems and structures related to investment in R&D projects in the process dimension, international interactions infrastructure, and foreign investment attraction in R&D in funding and financing of R&D projects output and, The successors of imported products in the commercialization dimension have the greatest impact.

References:

• آذر، عادل، غلامزاده،رسول، قنواتی، مهدی، (1391)، مدلسازی مسیری-ساختاری در مدیریت: کاربرد نرم‌افزار Smart PLS، انتشارات نگاه دانش.


• استین فاکس، (2017). میزان هزینه‌های تحقیق و توسعه شرکت‌های بزرگ جهانی در سال 2017، نشریه بلومبرگ آمریکا.


• جعفری خانشیر، سعید، رادفر، رضا، حسنوی، رضا، آذرافرا، رضا، (1391)، شناسایی و اولویت بندی عوامل کلیدی موفقیت توسعه محصول جدید با رویکرد سیستم استنتاج فازی، فصلنامه مدیریت صنعتی، دانشکده علوم انسانی، دانشگاه آزاد اسلامی واحد سنندج.


• حسینی نیا، غلامحسین حسینی نیا، یعقوبی فرانی، احمد، ایرانی، مژگان، (1394)، عوامل مؤثر بر موفقیت تحقیق و توسعه در صنایع غذایی، نشریه کارآفرینی در کشاورزی.


• حسن­زاده، علیرضا، اسماعیلی گیوی، حمیدرضا، قاضی نوری، سپهر، انواری رستمی، علی اصفر، (1395). توسعه صنایع با فناوری سطح بالای ایران، تأمین مالی (سرمایه‌گذاری) و عوامل نهادی غیر رسمی، شریه علمی – پژوهشی مدیریت نوآوری.


• خمسه، عباس، عصاری، محمدحسین،(1398). مدیریت تحقیق و توسعه، انتشارات سرافراز.


• شریعتی، رضا، افخمی اردکانی، مهدی, (1395). شناسایی و اولویت‌بندی شاخص‌های ارزیابی عملکرد مراکز تحقیق و توسعه بر اساس مدل کارت امتیازی متوازن. پژوهشگاه صنعت نفت.


• شریفی، مریم، فغانی ماکرانی، خسرو، (1394)، بررسی رابطه بین ریسک نقدینگی


• صابر، علی، (1392). بررسی مفاهیم تحقیق و توسعه و نوآوری و نحوه اندازه گیری آنها در بنگاه ه، معاونت علمی و فناوری ریاست جمهوری- دفتر سیاستگذاری علم و فناوری.


• قاضی نوری, سپهر, امیری, مقصود, قاضی نوری, سروش, علیزاده, پریسا. (1396). بررسی عوامل موثر بر هزینه کرد بخش کسب‌وکار ایران در فعالیت‌های تحقیق و توسعه؛ مطالعه سه صنعت مختلف , فصلنامه مدیریت توسعه فناوری.


• کرمی پور، آزیتا، ژولی ،دومینیک، بولی، وینسنت، (1393)، عوامل سازمانی مؤثر بر انتخاب روش دستیابی به فناوری در سازمان‌های فناوری محور ایران، فصلنامه مدیریت توسعه فناوری.


• محمدبیگی، خشایار، فهیما، مریم، (2012)، بررسی عوامل موثر بر گروه‌های تحقیق و توسعه در مدیریت فناوری، دومین کنفرانس مدیریت فناوری.


• هاشم‌زاده، ابراهیم، حاجی‌حسینی، حجت‌الله، رادفر، رضا، ملک‌زاده، کرامت، (1393)، عوامل مؤثر در ایجاد توانمندی‌های نوآوری، مجله مدیریت نوآوری.


• نظری‌زاده، فرهاد، ن‍ژادنوری، محمد مهدی، حجازی، سید رضا. (1391)، نقش و تاثیر عوامل سازمانى موثر بر موفقیت نوآورى در صنعت دفاعى، مجله مدیریت نوآوری.


• ‏Aboody, D.; Lev, B. (1998). The Value Relevance of Intangibles: The Case of Software Capitalization. J. Account. Res. 36, 161–191.


• Alper Kiraz, Onur Canpolat, Enes Furkan Erkan, Fatih Albayrak, (2018). Evaluating R&D Projects Using Two Phases Fuzzy AHP and Fuzzy TOPSIS Methods. European Journal of Science and Technology, 14, pp. 49-53.


• Amitabh G., (2019), Capital Structure, Ownership Structure and R&D Investments: Evidence from Indian Firms, IUP Journal of Applied Finance. Vol. 25 Issue 1, p36-59. 24p.


• Ashraful Alam, Moshfique Uddin, Hassan Yazdifar, (2019). Institutional determinants of R&D investment: Evidence from emerging markets, Technological Forecasting and Social Change, Volume 138, Pages 34-44,ISSN 0040-1625.


• Barge-Gil, A. and López, A., (2014). R&D determinants: Accounting for the differences between research and development. Research Policy, 43(9), pp.1634-1648.


• Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99 –120.


• Basar Oztaysi, Sezi Cevik Onar, Cengiz Kahraman, (2017). SELECTION AMONG INNOVATIVE PROJECT PROPOSALS USING A HESITANT FUZZY MULTIPLE CRITERIA DECISION MAKING METHOD. Journal of Economics, Finance and Accounting.


• Becker, B., (2013). The Determinants of R&D Investment: A Survey of the Empirical Research. School of Business and Economics, Loughborough University, Economics Discussion Paper Series, pp. 1750-4171.


• Bénassy-Quéré, A., Coupet, M., Mayer, T., (2007). Institutional determinants of foreign direct investment. World Econ. 30 (5), 764 –782.


• Branstetter, L.G., Glennon, B. and Jensen, J.B., (2019). The IT Revolution and the Globalization of R&D. Innovation Policy and the Economy, 19(1), pp.1-37.


• Bravo-Ortega, C. and Marin, A.G. (2011): R&D and productivity: A two-way avenue? World Development 39: 1090-1107.


• Bronwyn H. Hall, (2006). Contribution to the International Encyclopedia of the Social Sciences, second edition. University of California at Berkeley.


• Brown, J.R., Fazzari, S.M., and Petersen, B.C. (2009). Financing innovation and growth: cash flow, external equity, and the 1990s R&D boom. Journal of Finance, 64, 151–185.


• Cahit Ali Bayraktar, Gulsah Hancerliogullari, Basak Cetinguc & Fethi Calisir, (2016). Competitive strategies, innovation, and firm performance: an empirical study in a developing economy environment. Technology Analysis & Strategic Management.


• Cazavan-Jeny, A.; Jeanjean, T.; Joos, P. (2011). Accounting choice and future performance: The case of R&D accounting in France. J. Account. Public Policy, 30, 145–165.


• Y. Partial adjustment toward target R&D intensity, (2018), https://doi.org/10.1111/radm.12320.


• Choi, Y.R., Yoshikawa, T., Zahra, S.A., Han, B.H., (2014). Market-oriented institutional, change and R&D investments: do business groups enhance advantage? J.World Bus. 49, 466 –475.


• Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 128 –152.


• Darab, B. & Montazer, G., (2011).  An Eclectic Model for Assessing E-learning Readiness in the Iranian Universities Computers & Education, Volume 56, p.  900–910.


• Debski, I. and Williams, J., (2007). Business Research and Development in New Zealand, The Relevance of Industry Composition and R&D Intensity. In New Zealand Association of Economists' Conference, Christchurch, New Zealand.


• Dinh, T.; Kang, H.; Schultze, W. (2016). Capitalizing Research & Development: Signaling or Earnings Management? Eur. Account. Rev. 25, 373–401.


• Edquist, C., Johnson, B., (1997). Systems of Innovation: Technologies, Institutions and Organizations. Rouetledge, London.


• Eunil Park, Sang Jib Kwon, (2018). Effects of innovation types on firm performance: an empirical approach in South Korean manufacturing industry. Int. J. Business Innovation and Research, (2)15.


• Falk, M., (2006). What drives business Research and Development intensity across Organization for Economic Co-operation and Development (OECD) countries?. Applied Economic, (5)38, pp. 533-547.


• Fan, D., Rao-Nicholson, R. and Su, Y., (2019). When tough get going: Performance of R&D in the adverse economic conditions. Long Range Planning.


• Fornell, C., & Larcker, D. F., (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of marketing research, pp. 39-50.


• Freel, M. S. (2000). Strategy and structure in innovative manufacturing SMEs: The case of an English region. Small Business Economics, 15(1), 27 –45.


• Garcia-Vega M. ,Hofmann P. ,Kneller R., (2019), Multinationals and the Globalization of R&D, International Journal of Industrial Organization, doi: https://doi.org/10.1016/j.ijindorg.2019.01.001.


• Gebauer, H. , Worch, H. & Truffer, B. , (2012).  Absorptive Capacity, Learning Processes and Combinative Capabilities As Determinants of Strategic Innovation.  European Management Journal, 30(1), pp.  57-73.


• Gefen, D. and Straub, D.W. (2005). A Practical Guide to Factorial Validity Using PLS-Graph: Tutorial and Annotated Example. Communications of AIS, 16 (1), 91-109.


• Ghosh, C., & He, F. (2015). Investor Protection, Investment Efficiency and Value: The Case of Cross‐Listed Firms.Financial Management, 44(3), 499-546.‏


• Griliches, Z. (1998) R&D and Productivity: The Econometric Evidence. Chicago, IL: University of Chicago Press.


• Gu, L. (2016) Product market competition, R&D investment, and stock returns,Journal of Financial Economics. Volume 119, Issue 2, Pages 441-455,ISSN 0304-405X.


• Hair, J.F., Black, W.C., Babin, B.J., Anderson, R.E., Tatham, R. (2006)."Multivariate Analysis (6th ed.)", New Jersey: Pearson Education Inc


• Hair, J.F., Ringle, C.M., Sarstedt, M.,( 2011). PLS-SEM: indeed a silver bullet, Journal of Marketing heory andPractice 19 (2), 139e151.


• Hall, B.H., Mairesse, J., and Mohnen, P. (2010) Measuring the returns to R&D. In: Bronwyn, H.H. and Nathan, R. (eds.), Handbook of the Economics of Innovation.


• Hashi, Iraj & Stojčić, Nebojša, (2013). "The impact of innovation activities on firm performance using a multi-stage model: Evidence from the Community Innovation Survey 4," Research Policy, Elsevier, vol. 42(2), pages 353-366.


• Heeley, M. B., King, D. R., & Covin, J. G. (2006). Effects of firm R&D investment and environment on acquisition likelihood. Journal of Management Studies, 43(7),1513–1535.


• Henneberg, M. M. S. F. G. Z. S. C., (2017). Networking capability in supplier relationships and its impact on product innovation and firm performance. International Journal of Operations & Production Management, (5)37.


• Henseler, J., & Fassott, G. (2011). Testing moderating effects in PLS path models: An illustration of available procedures. In Handbook of partial least squares. Pp. 713-715, Springer Berlin Heidelberg.


• Hillier, D., Pindado, J., De Queiroz, V., De La Torre, C., (2011). The impact of country-level corporate governance on research and development. J. Int. Bus. Stud. 42, 76 –98.


• Howell, Sabrina T. (2017). "Financing Innovation: Evidence from R&D Grants." American Economic Review, 107 (4): 1136-64.


• Hurmelinna-Laukkanen, P., Olander, H., Blomqvist, K. & Panfilii, V., (2012).  Orchestrating R&D networks: Absorptive capacity, network stability and innovation appropriability.  European Management Journal , Volume 30, pp.  552-563.


• Inge C. Kerssens-van Drongelen, Jan Bilderbeek, (2017). R&D performance measurment: more than choosing a set metrics.


• Jansen, J., Van den Bosch, F. & Volberda, H., (2005).  Managing potential and realized absorptive capacity: how do organizational antecedents matter.  Academy of Management Journal, 48(6), pp.  999-1015.


• Jimenez-Barrionuevo, M., Gacia-Morales, V. & Miguel Molina, L., (2011).  Validation of an instrument to measure absorptive capacity.  Technovation, Volume 31, pp.  190-202.


• Jin, Z.; Shang, Y.; Xu, J., (2018). The impact of government subsidies on private R&D and firm performance: Does ownership matter in China’s manufacturing industry? Sustainability, 10, 2205.


• Knott, A.M. (2012) The trillion-dollar R&D fix. Harvard Business Review, 90, 76–82.


• Kostopoulos, K., Papalexandris, A., Papachroni, M., & Ioannou, G. (2011). Absorptive Capacity, Innovation, and Financial Performance. Journal of Business Research, 64 (12), 1335-1343.


• La Porta, R., Lopez-de-Silanes, F., Shleifer, A., Vishny, R., (1997). Legal determinants of external finance. J. Financ. 52 (3), 1131 –1150.


• Lee, C.-L. and Wu, H.-C. (2016) How do slack resources affect the relationship between R&D expenditures and firm performance? R&D Management, 46, 958–978.


• Lee, J., & Shim, E. (1995). Moderating effects of R&D on corporate growth in U.S. and Japanese hi-tech industries: An empirical study. The Journal of High Technology Management Research, 6(2), 179 –191.


• Lee, N. (2019). R&D Accounting Treatment, R&D State and Tax Avoidance: With a Focus on Biotech Firms. Sustainability, 11, 44.


• Lev, B.; Sougiannis, T. (1996). The capitalization, amortization, and value-relevance of R&D. J. Account. Econ. 21, 107–138.


• Lilien, G. L., & Srinivasan, R. (2010). Marketing spending strategy in recessions. Australasian Marketing Journal, 18, 181 –182.


• Lin, C., Lin, P., Song, F., (2010). Property rights protection and corporate R&D: Evidence from China. Journal of Development Economic, pp. 49-62.


• Lin, H.-C., Chien, C.-C., and Chiu, S.-C. (2016) The impact of value-relevant accounting rules on innovative activities. R&D Management, 46, 872–886.


• M Bednarz, T Broekel, (2019). The relationship of policy induced R&D networks and interregional knowledge diffusion, Department of Human Geography and Spatial Planning.


• García-Vega,P .Hofmann, R.Kneller, (2019). Multinationals and the globalization of R&D, International Journal of Industrial Organization,Volume 63, Pages 583-614, ISSN 0167-7187.


• Mand, M., (2019). On the cyclicality of R&D activities. Journal of Macroeconomics, 59, pp.38-58.


• Manuel, J., Francisco, J., & Félix, A. (2009), Exploring the impact of individualism and uncertainty avoidance in Web-based electronic learning: An empirical analysis in European higher education, Computers & Education, 52. 588 598.


• Muhammad Shahid Qureshi, Nergis Aziz and Sarfraz A. Mian, (2017). How marketing capabilities shape entrepreneurial firm’s performance? Evidence from new technology based firms in turkey. Journal of Global Entrepreneurship Research, pp. 7-15.


• Murovec, N. & Prodan, I., (2009).  Absorptive capacity, its determinants, and influence on innovation output :Cross-cultural validation of the structural model.  Technovation ,Volume 29, pp.  859-872.


• Myeong-Ho Lee and In Jeong Hwang, (2003). Determinants of Corporate R&D Investment: An Empirical Study Comparing Korea’s IT Industry with Its Non-IT Industry. ETRI Journal.


• Negin Salimia, Jafar Rezaei, (2018). Evaluating firms’ R & D performance using best worst method. Evaluation and Program Planning, Volume 66, pp. 147-155.


• Nelson, M.; Elliott, J.; Tarpley, R. (2003). How are earnings managed? Examples from auditors . Account. Horiz.


• Nieto, M. & Quevedo, P., (2005). Absorptive capacity, technological opportunity, knowledge spillovers and innovative effort.  Technovation , Volume 25, pp.  1141-1157.


• Ola Lome, Alf Gunnar Heggeseth, Øystein Moen, (2016). The effect of R&D on performance: Do R&D-intensive firms handle a financial crisis better?. Journal of High Technology Management Research.


• Oswald, D.R. (2008). The determinants and value relevance of the choice of accounting for research and development expenditures in the United Kingdom. J. Bus. Financ. Account. 35, 1–24.


• Pandit, S., Wasley, C. E., & Zach, T. (2011). The Effect of Research and Development (R&D) Inputs and Outputs on the Relation between the Uncertainty of Future Operating Performance and R&D Expenditures. Journal of Accounting, Auditing & Finance, 26(1), 121–144. https://doi.org/10.1177/0148558X11400583.


• Perkmann, M. , Walsh, K.,. (2007) “University–industryrelationships and open innovation: Towards a research agenda “, International Journal of Management Reviews, Vol 9 Issue 4 pp.  259–280.


• Ramessur, K. M. D. K. H. V., (2017). Total Quality Management and innovation: relationships and effects on performance of agricultural R & D organisations. International Journal of Quality & Reliability Management, (3)34.


• Reynard, E., (1979). A method for relating research spending to net profits. Res. Manag., 22, 12–14.


• Ringel, M.S., (2017). What is the right amount to spend on biopharma R&D? Nature Reviews Drug Discovery, 16, 597–598.


• Sadeghi, A. , Azar, A. , & Rad, R. , (2012).  Developing a fuzzy group AHP model for prioritizing the factors affecting success of high-Tech SME›s in Iran: A Case Study.  Procedia-Social and Behavioral Sciences, 62, pp.  957-961.


• Samsul Alam. Md., Muhammad Atif, Chu Chien-Chi, Uğur Soytaş, (2019). Does corporate R&D investment affect firm environmental performance? Evidence from G-6 countries,Energy Economics,Volume 78 ,Pages 401-411,ISSN 0140-9883.


• Shahid Amin, Shoaib Aslam, (2017). Intellectual Capital, Innovation and Firm Performance of Pharmaceuticals: A Study of the London Stock Exchange. Journal of Information & Knowledge Management, (2)16.


• Simpkin V, Namubiru-Mwaura E, Clarke L, et al., (2019). Investing in health R&D: where we are, what limits us, and how to make progress in Africa BMJ Global Health;4:e001047.


• Somaya, D., Williamson, I. O., & Zhang, X., (2008). Combining patent law expertise with R&D for patenting performance. Working Paper. Melbourne: Intellectual Property Institute of Australia.


• Soo, C. , Devinney, T. & Midgley, D., (2007).  External knowledge acquisition, creativity and learning in organizational problem solving.  International Journal of Technology Management, 38(1,2), p.  137–59.


• Spar DL, Yoffie D, Goodman J., (1998). Foreign Direct Investment and the Demand for Protection.


• Sorin M.S.Krammer, (2015). Do good institutions enhance the effect of technological spillovers on productivity? Comparative evidence from developed and transition economies, Technological Forecasting and Social Change, Pages 133-154.


• Stennett, A., (2011). R&D Policy, Performance and Barriers, Research and Information Service, Northern Ireland.


• The Measurement of Scientifi, T. a. I. A. O. P. P. D. H, OECD, 2015, Frascati Manual, (2015): Guidelines for Collecting and Reporting Data on Research and Experimental Development.


• Ufuk BÖLÜKBAŞ, Ali Fuat GÜNERİ, (2017). A FUZZY MULTI-CRITERIA DECISION APPROACH FOR MEASURING TECHNOLOGY COMPETENCY PERFORMANCE OF SMEs. Sigma J Eng & Nat Sci, 8(1), pp. 31-40.


• Valentina Lazzarotti, RaffaellaManzini,LucaMari, (2016). A model for R&D performance measurement. Int. J.Production Economics.


• Van Elk, Roel, ter Weel, B., van der Wiel, K. and Wouterse, B., (2019). Estimating the Returns to Public R&D Investments: Evidence from Production Function Models. De Economist, 167(1), pp.45-87.


• Vega-Jurado, J., Gutiérrez-Gracia, A., Fernández-de-Lucio, I. and Manjarrés-Henríquez, L., (2008). The effect of external and internal factors on firms’ product innovation. Research policy, 37(4), pp.616-632.


• Vinzi, V. E., Chin, W.W., Henseler, J., & Wang, H. (2010), Handbook of Partial Leastmquares, Springer, Germany: Berlin.


• Wang, C. L., & Ahmed, P. K., (2007). Dynamic capabilities: A review and research agenda. International Journal of Management Reviews, 9(1), 31 –51.


• Wang, E.C., (2010). Determinants of R&D investment: The extreme-bounds-analysis approach applied to 26 OECD countries. Research Policy 39: 103-116.


• Wang, J. -C., & Tsai, K. -H., (2004). Productivity growth and R&D expenditure in Taiwan's manufacturing firms. Growth and productivity in East Asia. NBER-East Asia Seminar on Economics. University of Chicago Press.


• Wang, C., Yi, J., Kafouros, M., & Yan, Y., (2015). Under what institutional conditions do business groups enhance innovation performance?. Journal of Business Research, 68(3), 694-702.‏


• Welsch, H., Liao, J., & Stoica, M., (2001). Absorptive capacity and firm responsiveness: An empirical investigation of growth oriented firms. Second USASBE/SBIDAConference: An Entrepreneurial Odyssey, Orlando.


• Wu, J., Wang, C., Hong, J., Piperopoulos, P., Zhuo, S., (2016). Internationalization and innovation performance of emerging market enterprises: the role of host-country institutional development. J. World Bus. 51, 251 –263.


• Xiao, G., (2013). Legal shareholder protection and corporate R&D investment. Journal of Corporate Finance, 23, 240-266.


• Xu, J.; Sim, J., (2018). Characteristics of Corporate R&D Investment in Emerging Markets: Evidence from Manufacturing Industry in China and South Korea. Sustainability, 10, 3002.


• Yen , H. , (2012).  Service Innovation Readiness: Dimensions and Performance outcome.  Decision Support Systems, Volume 53, p.  813–824.


• ZAKRZEWSKA-BIELAWSKA, A., (2014). High Technology Company – Concept, Nature, Characteristics.  International Conference; 8th, Management, marketing and finances; Recent advances in management, marketing, finances, 93-98.