The Effects of Product Diversification on R&D Intensity in Emerging Economies: The Mediate Role of Slack Resources

Abstract

Product diversification has become a vital operational strategy for firms in emerging economies to achieve competitive advantages. However, insufficient attention has been paid to the impacts of product diversification on research and development. Based on resource-based view, this paper empirically examines whether product diversification influences the intensity of firms’ R&D investment and further discusses the functions of slack resources as a mediator. By employing a large sample of Chinese manufacturing firms, the investigation demonstrates that the product diversification has significant negative effects on firms’ R&D intensity, and slack resources plays a full mediating role between them.