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This study aims to analyze the link between earnings pressure and R&D cut as well as the moderating effects of family control and debt.

In total, 6,130 firm-year observations of Taiwanese-listed firms were used to test the hypotheses by using a panel data regression with fixed effects estimation.

The study reveals that earnings pressure is positively related to R&D cut, and this relationship can be softened when having the presence of family control and debt.

This study is conducted based on some conditions: data collection comes from a single source, earnings pressure mainly comes from analysts, R&D intensity is significant among industries, debt is a given condition to managers. Future studies, thus, are suggested to use other approaches to have further information and extend the knowledge without these conditions.

Under the pressure of meeting analyst forecast, managers have more opportunities to flourish their priority on improving temporary profits rather than implementing R&D investments with costly budget but unpredictable outcomes. In addition to responding to the positive effect of earnings pressure on trimming long-term corporate investments, this study also found some corporate governance mechanisms to soften the managerial short-termism behavior.

The findings partially contribute to broadening the existing knowledge base on the impact of earnings pressure on corporate activities and how some mechanisms serve as moderators.

This study aims to compare alternative search behaviors managers enact with regard to firm aspirations.

The behavioral theory of the firm predicts that poor performance relative to aspiration levels leads to search for ways to raise performance over aspirations. Most researchers have assumed search leads to risk‐taking or innovation. However, firms might search for ways to raise performance without incurring additional risk, such as reducing expenses. This paper compares the two models of search using data on research and development (R&D) spending.

The results generally support the cost cutting argument; R&D spending increases monotonically with performance relative to social aspirations.

These results suggest researchers need to consider searches that emphasize cost reduction, as well as searches that emphasize innovation.

Overall, this paper extends behavioral work on risk‐taking and R&D to provide a more complex view of the interactions between kinds of aspiration levels and both innovation and search behavior.

The purpose of this paper is to provide a theoretical support for managers and investors and help them to identify corporate investment decisions on research and development (R&D) rationally.

Grouping and regression analysis are employed in the research.

The paper finds that managers in firms with medium accounting performance and at the border of profit target are prone to manage earnings by real R&D transactions, namely reducing R&D expenditures.

The conclusions are of great significance for innovation promotion in China.

The relevance of finance for strategy is probably never greater than during a recession. We argue that the strategy literature has been virtually silent on the issue of recessions, and that this constitutes a regrettable sin of omission. Recessions are also periods when the commonly held view of financial markets in the strategy literature – efficient, and therefore strategically irrelevant – is particularly misplaced. A key route to rectify this omission is to focus on how recessions affect investment behavior, and thereby firms’ stocks of assets and capabilities which ultimately will affect competitive outcomes. In the present chapter, we aim to contribute by analyzing how two key aspects of recessions, demand reductions and reductions in credit availability, affect three different types of investments: physical capital, R&D and innovation, and human- and organizational capital. We synthesize and conceptualize insights from finance- and macroeconomics about how recessions affect different types of investments and find that recessions not only affect the level of investment, but also the composition of investments. Some of these effects are quite counterintuitive. For example, investments in R&D are both more and less sensitive to credit constraints than physical capital is, depending on available internal finance. Investments in human capital grow as demand falls, and both R&D and human capital investments show important nonlinearities with respect to changes in demand.

Low- and medium-technology sectors' (LMTs) role in modern economies has been overshadowed by the argument relating knowledge creation to R&D and thus to high-tech industries. Nevertheless, whereas a broader definition of innovation has enabled LMTs to emerge as innovative environments, a blind reliance on non-R&D-based indicators may be harmful too by neglecting LMTs' contribution to the development of cutting-edge, R&D-based knowledge. This paper aims to provide answers to the following questions: do LMTs innovate? Do they induce high-tech innovations across other sectors? Do networks have an impact on LMTs' innovation commitment? Can LMTs' innovation commitment be related to a better performance?

The research method used in this work was based on a case study approach using in-depth face-to-face interviews with representatives from two footwear companies and one technology supplier.

Collaboration with relevant stakeholders along the footwear value chain proved fundamental to the creation of innovation opportunities for all parties involved. Both footwear companies have embraced innovation strategies, allowing them to take over new functions along the value chain and build successful international paths. These strategies involved active participation in cutting-edge, high-tech knowledge prompting innovation at higher-tech companies too.

The paper fails to establish a clear causative relationship between companies' performance and their R&DI commitment. In addition, due to the number of companies involved in the study, the findings cannot be simply extrapolated to the whole Portuguese footwear sector.

The paper highlights the commitment to innovation in a traditional sector and explores an underresearched topic – that of LMTs' involvement in R&D activities.

This study proposes a novel measure for management’s horizon (short-termism or myopia vs long-termism or hyperopia) derived from easily obtainable firm-level accounting and stock market performance data. The authors use the measure to explore the impact of managements’ horizon on firms’ investment efficiency.

The authors rely on two commonly used but uncorrelated measures of management performance: accounting performance (return on capital employed, ROCE) and stock market performance (average abnormal return, AAR). The authors combine these measures to develop a multidimensional framework for performance, which classifies firms into four groups: efficient (high accounting and high market performance), poor (low accounting and low market performance), myopic (high accounting and low market performance) and hyperopic (low accounting and high market performance). The authors validate this framework and deploy it to explore the relationship between horizon and firms’ investment efficiency.

In validation tests, the authors show that management myopia (hyperopia) explains firms’ decision to cut (grow) research and development investments. Further, as expected, myopic (hyperopic) firms are associated with significantly more (less) accrual and real earnings management. The empirical tests on the link between horizon and investment efficiency suggest that myopic managers cut new investments while their hyperopic counterparts grow the same. Ultimately, the authors find that myopia (hyperopia) exacerbates(mitigates) the over-investment of free cash flow problem.

The authors introduce a framework for assessing management’s horizon using easily obtainable measures of performance. The framework explains inconsistencies in prior empirical research using different measures of performance (accounting versus market). The authors demonstrate its utility by showing that the measure explains decisions around research and development investment, earnings management and firm investments.

The purpose of this paper is to investigate the determinants and persistence of research and development (R&D) investments in Malaysia.

The approach involves a regression analysis.

The regression analysis shows that lagged absorbed slack defined as the ratio of selling and administrative expenses to total sales and sales growth have positive affect on the R&D expenses, whereas diversification has negative impact on R&D expenses after controlling for leverage and profitability of the firms. Persistence in the firm‐level R&D expenses is found. Occasional tendency among firms to cut down R&D spending over the period of 2000‐2005 is found.

Sample size is a limitation.

The findings have implications for the corporate governance and innovation charter of the firms.

The paper provides useful information from Malaysia regarding the determinants and persistence of R&D investments.

In recent years, the demand for garments has significantly increased, requiring manufacturers to speed up their production to attract customers. Cut order planning (COP) is one of the most important processes in the apparel manufacturing industry. The appropriate stencil arrangement can reduce costs and fabric waste. The COP problem focuses on determining the size combination for a pattern, which is determined by the length of the cutting table, width, demand order, and height of the cutting equipment.

This study proposes new heuristics: genetic algorithm (GA), symbiotic organism search, and divide-and-search-based Lite heuristic and a One-by-One (ObO) heuristic to address the COP problem. The objective of the COP problem is to determine the optimal combination of stencils to meet demand requirements and minimize the total fabric length.

A comparison between our proposed heuristics and other simulated annealing and GA-based heuristics, and a hybrid approach (conventional algorithm + GA) was conducted to demonstrate the effectiveness and efficiency of the proposed heuristics. The test results show that the ObO heuristic can significantly improve the solution efficiency and find the near optimal solution for extreme demands.

This paper proposes a new heuristic, the One-by-One (ObO) heuristic, to solve the COP problem. The results show that the proposed approaches overcome the long operation time required to determine the fitting arrangement of stencils. In particular, our proposed ObO heuristic can significantly improve the solution efficiency, i.e. finding the near optimal solution for extreme demands within a very short time.

This research investigates the impact of strategic research and development (R&D) (one led by a firm’s innovation orientation) on stock market performance during the economic disruption caused by the 2016 demonetization of high-value currency notes in India. It shows how firms’ strategic focus on innovation and integrated R&D initiatives can help mitigate shareholders’ losses and protect market value during negative macroeconomic shocks.

We analyzed financial and administrative data from firms listed in the Bombay Stock Exchange (BSE) 500 index and used the Fama French market model with appropriate instruments accounting for possible endogeneity to identify the impact. To ensure the reliability of our findings, we conducted robustness checks with alternate event windows, estimation methods, and variable measurements.

Strategic R&D plays a crucial role in building resilience against macroeconomic shocks. It effectively mitigated shareholders’ losses in the immediate aftermath of the shock, with an elasticity of abnormal returns of 7.65% on day zero, 13.1% during the first five days and 10.5% after the first fortnight. We also find that firms that are business-to-business (B2B), as well as those that are older and less leveraged, are better able to combat such a shock.

The study looked at one shock, namely demonetization. Future research is needed to demonstrate the generalizability of results during other macroeconomic shocks, like the COVID-19 pandemic. The study focuses on relatively near-term impacts, leaving the long-term value-creation effects of strategic R&D unexplored.

Innovation orientation acts as a structural enabler, allowing firms to make strategic R&D investments that mitigate losses during macroeconomic shocks. It explains that managers should avoid myopically managing R&D investments and align them with the firm’s innovation focus to enhance value creation.

While the currency demonetization was widely considered to be detrimental for firms as an unannounced negative monetary shock, our research shows that firms with high levels of strategic R&D were successfully able to counteract such a shock.

This is the first study to examine the short-term loss mitigation impact of firms’ focus on innovation and strategic R&D. It emphasizes the role of innovation-focused strategies during economic crises.

We study the events that motivate CEOs to underinvest in R&D long-term projects (CEO myopia). Based on the existing literature in earnings management and agency theory, myopia is likely to become more problematic under five circumstances: when the CEO nears retirement (the CEO horizon problem), R&D projects have very long time horizons (the project horizon problem), the firm’s financial health is deteriorating (the cover-up problem), ownership structure is heavily weighted toward insider owners (minority owner oppression problem), and when the threat of hostile takeover increases (the entrenchment problem). We setup a dynamic simulation model in which rational CEOs maximize the total value of their bonus compensation over their tenure. Our findings related to the five circumstances are consistent with the extant literature. However, we found an unexpected stable, nonlinear (inverted U-shaped) relationship between CEO tenure and R&D investment. We discuss the theoretical implications of our model and offer suggestions for future research.