Gaining comparative advantage through discretionary expenditures: the returns to R&D and advertising

Article Abstract:

The idea that increased R&D and advertising expenses can result in a comparative advantage for a company is examined. After providing for the variables peculiar to the company and the relationship between discretionary expenditures and profitability, findings of the study indicate that bigger R&D and advertising budgets are not any more effective in increasing a company's competitiveness than other forms of investment. The results of the study suggest that the extent to which R&D and advertising can generate a comparative advantage is largely dependent on the specific nature of the spending and how well it works with the asset and skill base of the organization such that attempts by other companies to replicate this strategy are thwarted.

Research, Advertising expenditures

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Innovation, competitive advantage and rent: a model and test

Article Abstract:

There are four conditions that must first be satisfied before firms can enjoy above-average returns, or rents, generated by their innovative activities. These prerequisites are innovation team proficiency, understanding of antecedents and consequences, development and utilization of new competences, and creation of competitive advantages. A stage model incorporating these four antecedents is developed. Using LISREL analysis, it is tested on a sample of 58 innovation projects in 40 organizations in eight countries. The results indicate that the existence of the four aforementioned conditions facilitates the prediction of the generation of rents from innovation projects.

Technological innovations, Organizational change

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Dynamic patent races with risky choices

Article Abstract:

Research and development efforts usually evolve in stages. Firms which are in a lead position with regard to innovation will tend to spend more money on research and development than a follower firm. The leader has more to lose in falling behind than the follower. Both types will compete more strenuously in the latter stages than in the earlier stages of development. Follower firms will tend to take riskier innovation routes than do lead firms.

Patents

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