Determinants of Corporate R&D Search Intensity: An Integrated Framework with Evidence from Taiwan's Semiconductor Industry.

This paper explores how corporate R&D search intensity is determined by five major dimensions of factors: institutionalized, problemistic, slack, Schumpeterian, and industrial. Using sample data from Taiwan's semiconductor industry, this paper finds that R&D intensity is predominantly determined by the R&D intensity in the previous year, and significantly influenced by the average R&D intensity of other firms in the same industry segment, as well as the unabsorbed slack. Accordingly this paper builds up a theoretical model in which the inertia effect, peer effect, and liquidity effect largely co-determine the R&D intensity. Inertia effect maintains stability in resource commitments. Peer effect assures the firm not to be left behind from other firms in the same industrial segment. Liquidity effect reflects cash positions available for regular and extra commitments in R&D search activity. The two institutionalized forces and slack resources stabilize a firm's regular resource allocation, sustain its comparative advantages, and increase its chances of survival. [ABSTRACT FROM AUTHOR]