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Open AccessArticle

Characteristics of Corporate R&D Investment in Emerging Markets: Evidence from Manufacturing Industry in China and South Korea

1
Department of Business Administration, Dankook University, Jukjeon-ro 152, Yongin-si, Gyeonggi-do 16890, Korea
2
International College, Dankook University, Jukjeon-ro 152, Yongin-si, Gyeonggi-do 16890, Korea
*
Author to whom correspondence should be addressed.
Sustainability 2018, 10(9), 3002; https://doi.org/10.3390/su10093002
Received: 17 July 2018 / Revised: 17 August 2018 / Accepted: 21 August 2018 / Published: 24 August 2018
(This article belongs to the Special Issue Transition from China-Made to China-Innovation )
The issue concerning the increasing research and development (R&D) investment in emerging markets is especially attractive for many researchers and practitioners. This paper measures and compares the characteristics of Chinese and South Korean R&D expenditures of manufacturing companies from 2012 to 2016. It also examines the impact of R&D investment on firm performance. The results show that debt maturity and cash reserves are positive determinants of R&D investment in China and South Korea. Firm size, internal financing, and debt ratio are restrictive factors of R&D intensity in Chinese manufacturing companies, while debt ratio is the only negative determinant of R&D investment in their South Korean counterparts. The results also show that R&D intensity exhibits a strong positive impact on the performance of manufacturing companies in both countries. Moreover, this impact is stronger in South Korea than in China. In addition, R&D investment has a positive time-lag effect only on the performance of Chinese manufacturing companies. Our study presents some new evidence for the relationship between R&D intensity and firm performance in emerging markets. View Full-Text
Keywords: R&D investment; firm performance; manufacturing industry; emerging markets; China; South Korea R&D investment; firm performance; manufacturing industry; emerging markets; China; South Korea
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Xu, J.; Sim, J.-W. Characteristics of Corporate R&D Investment in Emerging Markets: Evidence from Manufacturing Industry in China and South Korea. Sustainability 2018, 10, 3002.

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