R&D investment along the firm life-cycle: new evidence from high-tech industries

Traditional life-cycle theory typically holds that firms are more innovative in earlier life-cycle stages than in later stages. However, this may not apply to firms in high-tech industries that heavily rely on innovation to build competitive advantages and that are equipped with rich innovation-related knowledge. This paper analyses R&D investment along the life-cycle for high-tech firms, and investigates the boundary conditions of the hypothesised baseline effects by considering the moderating effects of three environmental factors (environmental complexity, environmental dynamism and environmental munificence). Analyses of high-tech manufacturing firms during 1989-2018 reveal that in comparison with firms in other stages, firms in introduction and decline stages make more R&D investment, especially in complex and moderately munificent environments. Besides, environmental dynamism significantly reduces R&D investment motivation in the decline stage but does not influence it in the introduction stage. Our results offer insights into high-tech firms' innovation pattern along their life-cycle.