Optimal timing of R&D for effective utilization of potential resources in innovation

Abstract

Contrary to its highest R&D intensity, Japan has dramatically decreased its productivity in the 1990s. This can be attributed to a low marginal productivity of technology. Such a productivity decrease compels a delay in R&D, which results in reduced R&D productivity leading to a vicious cycle between R&D and its return. In this context optimal timing of R&D is crucial, particularly during economic stagnation and consequent difficulties in financing R&D. This paper analyzes the rationale for optimal timing of R&D and its interacting relationship with marginal productivity of technology. Empirical analyses are attempted focusing on Japan’s leading high‐technology firms and their innovative products.

Citation

Watanabe, C. and Tokumasu, S. (2003), "Optimal timing of R&D for effective utilization of potential resources in innovation", Journal of Advances in Management Research, Vol. 1 No. 1, pp. 11-27. https://doi.org/10.1108/97279810380000355