How firms innovate through R&D internationalization? An S-curve hypothesis

This article examines the effects of R&D internationalization and organizational slack on innovation performance. We suggest that there is an S-shaped relationship between R&D internationalization and innovation performance. Innovation performance increases in the decentralization stage, decreases in the transition stage, and increases again in the recentralization stage. In addition, organizational slack is hypothesized to have a negative moderating effect on the S-shaped relationship. Longitudinal data on 210 Taiwanese firms in the information technology sector during a 10-year period is collected to test the hypotheses. The findings support our prediction. Managerial implications and future research directions are discussed.

► There are three modes in the R&D internationalization, decentralization, transition, and recentralization.
► There is an S-shaped relationship between R&D internationalization and innovation performance.
► Organizational slack has a negative moderating effect on the S-shaped relationship.